TSMC's first-quarter profit surges 58% year-on-year, hitting a quarterly record high, but simultaneously warns that the Iran conflict is driving up costs

On Thursday, April 16, Taiwan-based chipmaker TSMC announced that its profit for the first quarter of this year rose sharply by 58% year-on-year, driven by strong demand fueled by the artificial intelligence boom. However, the company also warned that the Iran conflict is pushing up costs.

As one of the world’s largest semiconductor foundries and a key supplier to Apple and Nvidia, TSMC reported that it achieved a net profit of NT$572.5 billion (approximately USD 18.1 billion) in the first quarter of this year—its highest quarterly profit ever and surpassing analysts’ expectations.

This represents a 58.3% increase compared to NT$361.6 billion (about USD 11.5 billion) in the same period last year, and a 13.2% rise from the previous quarter (October to December). The company stated that revenue for the first quarter grew 8.4% quarter-on-quarter to reach USD 35.9 billion. For the current second quarter (April to June), TSMC expects revenue to further grow to between USD 39 billion and USD 40.2 billion.

With continued surge in demand related to artificial intelligence, TSMC is accelerating the expansion of wafer fabrication plants in the United States, Japan, and Taiwan, focusing on producing more advanced 3-nanometer semiconductors widely used in smartphones and AI products. The company emphasized that demand linked to AI remains exceptionally strong.

However, TSMC also cautioned that the Iran conflict could have implications. This conflict not only raises global supply chain costs but also disrupts the supply of critical chemicals and gases—such as helium—needed for chip manufacturing. TSMC’s Chief Financial Officer, Hwang Jen-chao, said that although cost increases due to the Iran conflict may compress profit margins, the company has already built up "safety stock" for materials including helium, and expects no short-term impact on operations.

TSMC has committed to large-scale capacity expansion both in Taiwan and overseas, including a USD 16.5 billion investment in building a factory in Arizona, USA. The company said that capital expenditures over the next three years will be "significantly higher" than those over the past three years, to meet growing customer demands.

Previously, TSMC had announced an increase in its capital expenditure budget for 2025—from around USD 40 billion to USD 52 billion to USD 56 billion. On Thursday, the company further indicated that it expects its 2026 capital spending to approach the upper end of this range.

Source: rfi

Original: toutiao.com/article/1862642190817289/

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