Taiwan Semiconductor Manufacturing Company (TSMC) reported a consolidated revenue of approximately NT$260.009 billion (US$7.93 billion) for February 2025, reflecting an 11.3% decrease from January. However, this figure represents a significant increase of 43.1% compared to the same period in 2024. Cumulatively, the revenue for the first two months reached about NT$553.297 billion, marking a 39.2% rise year-over-year.
During its earnings call in January, TSMC estimated that its revenue for the first quarter in US dollars would range between US$25 billion and US$25.8 billion, with a decline of 4% to 7% compared to the previous quarter. Based on an exchange rate of NT$32.8 per US dollar, this translates to approximately NT$820 billion to NT$846.2 billion, with a gross margin estimated at 57% to 59% and an operating margin of 46.5% to 48.5%.
However, due to multiple earthquakes since January 21, TSMC anticipates that its consolidated revenue for the first quarter of 2025 will be closer to the lower end of its forecast, around US$25 billion, or roughly NT$820 billion. Preliminary estimates suggest that the company will recognize earthquake-related losses of approximately NT$5.3 billion after accounting for insurance claims. Consequently, March's revenue is expected to rebound to around NT$266.7 billion.
Maintaining annual outlook despite challenges
Despite challenges such as expanded AI chip bans leading some customers to reduce orders and the impact of earthquake losses, TSMC has not revised its outlook for the full year.
The company previously stated that 2025 is projected to be a year of strong growth, with annual revenue in US dollars expected to grow by 25% and capital expenditures anticipated to be between US$38 billion and US$42 billion. Revenue related to AI is expected to triple in 2024 and double again in 2025, with a compound annual growth rate of 45% over the next five years.
AI accelerators driving future growth
TSMC reported that revenue from AI accelerators accounted for approximately 15% of its total revenue in 2024, with growth exceeding twofold. As demand for AI-related products continues to surge, the company expects contributions from AI accelerators to double again in 2025.
Starting from a high base in 2024, the compound annual growth rate for revenue growth from AI accelerators is projected to approach 45% over the next five years. TSMC anticipates that AI accelerators will become the strongest driver of growth for high-performance computing platforms and the largest source of overall revenue growth.
Expanding US investments amid legal challenges
Recently, TSMC announced plans to reinvest at least US$100 billion in the US to build three wafer fabs, two advanced packaging facilities, and one research center. This indicates a potential significant expansion in TSMC's capital expenditure over the coming years, raising questions about the allocation between Taiwan and the US.
According to foreign media reports, TSMC's facility in Arizona is facing allegations of anti-American discrimination, with the case scheduled for a court hearing on April 8, 2025.
TSMC responded by stating that it does not comment on ongoing litigation. The company takes pride in its TSMC Arizona team of 3,000 members, whose collective efforts have contributed to the success of the new wafer fab in Arizona.
Article edited by Jerry Chen
