Morgan Stanley: TSMC's profit margin may have peaked in the first quarter.

Morgan Stanley analysts said in a research report that the recent profit margin of TSMC may have peaked in the first quarter. They wrote that driven by sustained demand for AI and its leading position in advanced nodes, this chip manufacturer may provide guidance for sequential revenue growth in the second quarter. However, they indicated that the profit margin in the first quarter may face some pressure as the Taiwanese company expands its 3nm chip production capacity and its 2nm chips enter mass production. Meanwhile, external cost pressures may persist, with geopolitical disturbances leading to an increase in the average selling price of chemicals. Morgan Stanley forecasts that TSMC's gross margin will decrease from the estimated peak of around 64% in the first quarter to around 62.4% in the second quarter. Nevertheless, these analysts believe that the long-term growth fundamentals of TSMC remain strong.