Taiwan Semiconductor Manufacturing (TSM) reported quarterly profits that surpassed market expectations and raised its full-year revenue growth forecast to over 30%. The world's largest contract chipmaker, a key supplier to tech giants such as Nvidia and Apple, now anticipates revenue growth exceeding 30%, up from the prior projection of approximately 30% growth in U.S. dollar terms. For the current quarter, the company expects revenue to reach between $39 billion and $40.2 billion, setting a new record high.
The Taiwan-based firm also indicated that capital expenditures are likely to hit the upper end of the projected range of $52 billion to $56 billion, underscoring its confidence in the artificial intelligence sector's outlook. "Demand remains robust," stated CEO C.C. Wei on Thursday, citing positive feedback from customers regarding their future expectations.
The upward revision in performance and spending plans suggests that demand for AI chips remains strong despite ongoing Middle East conflicts and associated energy supply disruptions. "Companies building AI infrastructure are not cutting back—they're accelerating investments," noted Josh Gilbert, market analyst at eToro.
Investors had expressed concerns that prolonged Middle East tensions could threaten TSM's production lines, given Taiwan's heavy reliance on imported fuel for electricity and the energy-intensive nature of advanced chip manufacturing. Recent supply disruptions from Qatar have cut off roughly one-third of the global helium supply. Helium, a byproduct of natural gas production, is used as a coolant in high-performance chip manufacturing.
Last week, senior vice president and chairman of Taiwan's semiconductor industry association, Hou Yongqing, called for increased strategic reserves of helium and natural gas in Taiwan, along with diversified sourcing channels, to ensure stable supply.
TSM's chief financial officer, Huang Ren Zhao, sought to ease concerns about potential fuel shortages, stating that production would not be affected in the short term as Taiwan has secured sufficient liquefied natural gas supplies through at least May. He added that the company is procuring specialty gases such as helium and hydrogen from multiple suppliers and regions, which should not materially impact chip output.
In the first quarter, TSM's net profit surged 58% to NT$572.48 billion (approximately $18.12 billion), exceeding analyst estimates. Revenue increased 35% to a record NT$11.34 trillion. The company's gross margin rose to 66.2%, up 7.4 percentage points year-on-year, indicating its ability to fully offset cost pressures amid strong demand.
TSM's stock experienced significant volatility in the first few months of the year, reflecting uncertainties linked to Middle East conflicts. Shares listed in Taipei rose more than 25% in January and February, boosted by strong capital expenditure plans, but gave back roughly half of those gains after tensions escalated in March. Since then, the stock has gradually recovered, closing at a new high on Thursday amid broader tech sector gains fueled by expectations of a U.S.-Iran peace deal and the reopening of key shipping routes such as the Strait of Hormuz.
Comments