On July 17, according to Reuters, TSMC announced record-breaking and higher-than-expected quarterly profits, but also warned that future revenues may be negatively impacted by U.S. tariffs, although this impact may not become apparent until the fourth quarter.

TSMC stated that due to increasingly strong demand for artificial intelligence, the company's sales for the third quarter are expected to rise again, and it has revised its full-year revenue outlook upward. The company also noted that its major customer NVIDIA recently received approval from the U.S. government to resume selling its H20 AI chips to China.

"The Chinese market is very large, and my customers can continue to supply chips to this big market, which is a very positive message for them, and also a good news for TSMC," said TSMC President C.C. Wei.

"We are considering the potential impacts of tariffs and many other uncertainties, so we have become more conservative," said Wei. However, he added that TSMC has not yet seen any changes in customer behavior so far.

In the April-June period, TSMC's revenue was 933.79 billion New Taiwan Dollars (approximately 228.2 billion RMB), an increase of 38.6% year-on-year, and net profit reached 398.3 billion New Taiwan Dollars (approximately 97.1 billion RMB), setting a new historical high, an increase of 60.7% year-on-year, marking the fifth consecutive quarter of double-digit growth.

Looking at the revenue share by different process technologies, TSMC's revenue from the 3nm process in the second quarter accounted for 24%, 5nm process for 36%, 7nm process for 14%, and 16/20nm and 28nm processes accounted for 7% respectively.

According to Reuters, for this quarter, TSMC's revenue is expected to jump by 40%, and full-year revenue is expected to grow by about 30% in USD terms, higher than the previous forecast of "around 25%".

However, TSMC said that despite the surge in sales, the appreciation of the New Taiwan Dollar against the U.S. Dollar (which has appreciated about 12% so far this year) will weaken profit margins.

TSMC's gross profit margin for the third quarter is expected to drop to between 55.5% and 57.5%, down from 58.6% in the second quarter, also influenced by TSMC's increased investment in new factories in the United States and Japan. However, the company maintains its capital expenditure plan for this year of 38 billion to 42 billion U.S. dollars. CFO Huang Wende stated that such expenditures are unlikely to suddenly decline in the future.

According to foreign media Notebook Check, TSMC plans to build or equip nine advanced factories in 2025, including eight wafer fabrication plants and one CoWoS packaging line, which will be the largest single-year expansion in the company's history. Capital expenditures will also increase accordingly. Management has set capital spending for 2025 at 38 billion to 42 billion U.S. dollars.

In March this year, TSMC and former U.S. President Trump announced a 100 billion U.S. dollar investment plan in the U.S. at the White House. Previously, TSMC had committed to investing 65 billion U.S. dollars in three factories in Arizona, with one already in operation.

But Trump said that tariffs on semiconductors may soon be implemented.

Local insiders said that if sales from another major customer of TSMC, Apple, are disappointing, TSMC's earnings in the second half of the year could also be affected. He said, "A warning signal is that Apple's sales in China have been weak." He added that this could be a factor in TSMC's cautious attitude towards earnings as the end of the year approaches.

According to data released by Canalys on January 16, 2024, Apple's sales and market share in mainland China both declined, making it the brand with the largest drop among the top five.

Notably, ASML, the lithography equipment giant, also issued a warning for 2026 revenue, even though its second-quarter revenue and profits exceeded expectations.

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