With just one subscription to Beyond the Wall Investing , you can save thousands of dollars a year on equity research reports from banks. You'll keep your finger on the pulse and have access to the latest and highest-quality analysis of this type of information.I initiated my investment coverage of Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM ) here on Seeking Alpha in late February 2024 with a "Buy" rating, which hasn't aged well so far, given the recent volatility spike onHe leads the inv ...

Financial Performance - Net revenue for Q1 2025 was $25,526 million, a decrease of 3.4% QoQ and an increase of 41.6% YoY[5] - Gross profit for Q1 2025 was $15,007 million, representing a gross margin of 58.8%, down from 59.0% in Q4 2024 but up from 53.1% in Q1 2024[5] - Operating income for Q1 2025 was $12,382 million, accounting for 48.5% of net revenue, compared to 49.0% in Q4 2024 and 42.0% in Q1 2024[5] - Net income for Q1 2025 was $10,972 million, a decrease of 3.7% QoQ and an increase of 60.2% YoY[5] - Earnings per share (diluted) for Q1 2025 was $0.42, compared to $0.44 in Q4 2024 and $0.27 in Q1 2024[5] - The company reported a comprehensive income of $11,942 million for Q1 2025, reflecting a 46.8% increase YoY[5] Assets and Liabilities - Total assets increased to $214.826 billion, up 6.6% quarter-over-quarter and 23.2% year-over-year[2] - Current assets reached $100.758 billion, representing 46.9% of total assets, with a year-over-year increase of 36.4%[2] - Cash and cash equivalents rose to $72.122 billion, a 12.6% increase from the previous quarter and 41.0% year-over-year[2] - Total liabilities amounted to $76.244 billion, a 6.9% increase from the previous quarter and 19.3% year-over-year[2] - Shareholders' equity attributable to the parent increased to $137.454 billion, reflecting a 6.4% quarter-over-quarter growth and 25.5% year-over-year[2] - Unappropriated earnings grew to $115.980 billion, a 6.8% increase from the previous quarter and 30.3% year-over-year[2] - Long-term investments reached $4.842 billion, up 7.9% quarter-over-quarter and 16.1% year-over-year[2] - Property, plant, and equipment totaled $102.419 billion, reflecting a 5.1% increase from the previous quarter and 11.4% year-over-year[2] - Total current liabilities increased to $42.157 billion, a 10.7% increase from the previous quarter and 36.4% year-over-year[2] Cash Flow - Cash generated from operating activities in Q1 2025 was $19,027 million, slightly up from $19,027 million in Q4 2024[8] - Cash and cash equivalents at the end of Q1 2025 were $72,839 million, an increase from $64,713 million at the beginning of the period[8] - Free cash flow increased by NT$36.48 billion to NT$294.74 billion in Q1 2025, driven by higher operating cash flow[57] Revenue and Market Insights - Management expects Q2 2025 revenue to be between US$28.4 billion and US$29.2 billion[28] - From 2024 to 2029, management anticipates a revenue increase of close to mid-20s% in US dollar terms[29] - High Performance Computing accounted for 59% of net revenue in Q1 2025, up from 53% in Q4 2024[37] - Revenue from North America represented 77% of total net revenue, while revenue from China, Asia Pacific, Japan, and EMEA accounted for 7%, 9%, 4%, and 3% respectively[40] Operational Metrics - Wafer shipments in Q1 2025 totaled 3,259 Kpcs, a decrease of 4.7% from Q4 2024 and an increase of 7.6% from Q1 2024[34] - Advanced technologies (7nm and below) accounted for 73% of total wafer revenue, with 3nm contributing 22% and 5nm contributing 36%[64] - Capital expenditures totaled US$10.06 billion in Q1 2025, down from US$11.23 billion in Q4 2024[58][59] Future Outlook and Risks - The company plans to continue investing in research and development to drive innovation and market expansion[9] - The company estimated earthquake-related losses to be approximately NT$5.3 billion, which will be recognized in Q1 2025[60] - TSMC faces significant risks including market conditions, demand and supply fluctuations, and intense competition[69] - The company cautions that actual results may differ materially from forward-looking statements due to various risk factors[69] - TSMC's ability to manage its capacity and preserve its intellectual property rights is critical for its operations[69] - The company acknowledges potential disruptions from natural disasters and unexpected events[69] Company Information - TSMC is headquartered in Hsinchu, Taiwan[67] - TSMC deployed 288 distinct process technologies and manufactured 11,878 products for 522 customers in 2024[67] - The company provides a broad range of advanced, specialty, and advanced packaging technology services[67] - TSMC's 2023 Annual Report on Form 20-F was filed with the SEC on April 18, 2024[69] - The company undertakes no obligation to update any forward-looking statement unless required by law[69]

Financial Data and Key Metrics Changes - First quarter revenue decreased by 3.4% sequentially in NT dollars and 5.1% in U.S. dollars, impacted by smartphone seasonality but partially offset by growth in AI-related demand [5][6]. - Gross margin decreased by 0.2 percentage points sequentially to 58.8%, primarily due to the earthquake impact and the start of overseas dilution [6][15]. - Operating margin decreased by 0.5 percentage points sequentially to 48.5% [6]. - First quarter EPS was TWD 13.94 and ROE was 32.7% [6]. - Cash and marketable securities at the end of the first quarter totaled TWD 2.7 trillion or US$81 billion [9]. Business Line Data and Key Metrics Changes - Revenue contribution by technology: 3-nanometer process technology contributed 22% of wafer revenue, while 5-nanometer and 7-nanometer accounted for 36% and 15%, respectively [7]. - Revenue contribution by platform: HPC increased by 7% quarter-over-quarter to account for 59% of first quarter revenue, while smartphone decreased by 22% to 28% [8]. Market Data and Key Metrics Changes - The company expects second quarter revenue to be between US$28.4 billion and US$29.2 billion, representing a 13% sequential increase and a 38% year-over-year increase at the midpoint [13]. - The full-year 2025 revenue is expected to increase by close to mid-20s percent in U.S. dollar terms, supported by robust AI-related demand and a mild recovery in other end market segments [25]. Company Strategy and Development Direction - The company plans to invest an additional US$100 billion in advanced semiconductor manufacturing in the U.S., bringing total investment to US$165 billion [31][36]. - The capital budget for 2025 is expected to be between US$38 billion and US$42 billion, with 70% allocated for advanced process technologies [18]. - The company aims for a long-term gross margin of 53% and higher, despite expected margin dilution from overseas fabs [16][17]. Management's Comments on Operating Environment and Future Outlook - Management noted that the January 21 earthquake impacted production but recovery efforts were successful [21]. - The company continues to observe robust AI-related demand and expects revenue from AI accelerators to double in 2025 [26]. - Management remains cautious about potential tariff impacts but has not seen changes in customer behavior so far [24][77]. Other Important Information - The company is working on balancing supply and demand for CoWoS capacity, with expectations of continued strong demand [50][145]. - The construction of new fabs in Arizona and Japan is ongoing, with plans to ramp up production based on customer demand [35][37]. Q&A Session Summary Question: AI demand and CoWoS capacity - Management acknowledged that while there have been rumors about CoWoS demand adjustments, the demand remains strong and is expected to exceed supply in 2026 [46][54]. Question: U.S. investment and tariff implications - Management clarified that the expansion in Arizona is driven by customer demand, particularly from U.S. companies, and they are in discussions with the U.S. government for necessary permits [61][62]. Question: Geopolitical risks and production planning - Management stated that they are mindful of potential impacts from recent tariff announcements but have not seen changes in customer behavior [76][77]. Question: Semiconductor tariffs and involvement in negotiations - Management confirmed that they do not get involved in tariff negotiations between governments [90]. Question: Revenue outlook and customer behavior - Management indicated that the strong second quarter guidance is driven by demand for 3-nanometer and 5-nanometer technologies, with no observed changes in customer behavior due to tariffs [99][101]. Question: Shareholder returns and buyback policy - Management reiterated their commitment to a sustainable and steadily increasing dividend policy rather than adopting a share buyback framework [152].

Unleash Innovation 2025 First Quarter Earnings Conference April 17, 2025 © 2025 TSMC, Ltd 0 TSMC Property Unleash Innovation © 2025 TSMC, Ltd 1 TSMC Property Agenda Unleash Innovation • Welcome Jeff Su, IR Director • Key Messages Wendell Huang, CFO C.C. Wei, Chairman & CEO • Q&A • 1Q25 Financial Results and 2Q25 Outlook Wendell Huang, CFO Unleash Innovation • TSMC's statements of its current expectations are forward-looking statements subject to significant risks and uncertainties and actual results may dif ...

A motorcycle is seen near a building of the Taiwan Semiconductor Manufacturing Company (TSMC), which is a Taiwanese multinational semiconductor contract manufacturing and design company, in Hsinchu, Taiwan, on April 16, 2025.Taiwan Semiconductor Manufacturing Company on Thursday beat profit expectations for the first quarter, thanks to a continued surge in demand for AI chips.Here are TSMC's first-quarter results versus LSEG consensus estimates:Revenue: $839.25 billion New Taiwan dollars, vs. NT$835.13 bill ...

Core Viewpoint - TSMC's stock has experienced significant sell-offs due to multiple bearish catalysts, including new export restrictions on Nvidia's processors and increased tariffs on China, leading to a year-to-date decline of 23% [2][3]. Group 1: Stock Performance - TSMC's share price closed down 3.6% on Wednesday, having dropped as much as 5.6% during the session, while the S&P 500 and Nasdaq Composite fell 2.2% and 3.1%, respectively [1]. - The stock's valuation has decreased in light of recent news and market conditions [2]. Group 2: Market and Regulatory Environment - Nvidia is now required to obtain an export license to sell its H20 processors to China, which may prevent sales of this product in the Chinese market [3]. - New restrictions on advanced AI semiconductors are expected to pressure overall demand for TSMC's manufacturing services [4]. - The U.S. has raised tariffs on China to 245%, and Federal Reserve Chairman Jerome Powell has indicated that interest rate cuts will be delayed until the inflationary impacts of these tariffs are better understood [5]. Group 3: Future Outlook - TSMC plans to increase prices on its 4nm chips by 30% due to surging demand, suggesting strong sales growth in the near term [6]. - The company is positioned to be a leading manufacturer of advanced chips for AI applications, but faces significant geopolitical risks due to U.S.-China tensions [6].

Core Viewpoint - TSMC is positioned to benefit from the significant growth of the global semiconductor market, which is projected to reach $2 trillion in annual revenue by 2032, more than triple the $656 billion generated last year [2][3]. Company Position and Market Share - TSMC holds a dominant position in the foundry market with an estimated share of 67%, which has increased by six percentage points in 2024, while Samsung's share has decreased to 11% [4]. - The company's technological advantage, particularly its advanced 3-nanometer process node, allows it to manufacture powerful and efficient chips, attracting major clients like AMD, Apple, and Nvidia [5][6]. Future Growth and Investments - TSMC plans to start mass production of its 2-nanometer processors in the second half of this year, potentially outpacing competitors like Samsung and Intel [7]. - The company has committed to investing $165 billion in the U.S. to establish advanced chip manufacturing facilities aimed at supporting AI applications [7][8]. - TSMC's strategy to diversify its manufacturing presence globally is expected to mitigate risks from trade-related conflicts [8]. Financial Performance - TSMC reported $90 billion in revenue for 2024, a 30% increase from the previous year, and a 42% revenue jump in Q1 2025 to $25.6 billion, exceeding market expectations [10]. - The company anticipates maintaining an annual revenue growth rate of 20% over the next five years, supported by a total addressable market of nearly $250 billion in foundry and packaging services [11][12]. - TSMC's current trading multiples of 22 times trailing earnings and 17 times forward earnings present a favorable valuation compared to the Nasdaq-100 index's forward earnings multiple of 27 [12].

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Semiconductor stocks are selling off as Trump's tariff agenda sparks ongoing tensions among trade partners. Is this an opportunity to buy Taiwan Semi?Generally speaking, stock prices move based on reactions to quarterly earnings or economic indicators such as inflation or unemployment rates. At the moment, those variables have taken a back seat to another gigantic topic: swaying investor sentiment.Of course, I'm referencing President Trump's tariff policies. With earnings season quickly approaching, investo ...

This account is managed by Noah's Arc Capital Management. Our goal is provide Wall Street level insights to main street investors. Our research focus is mainly on 20th century stocks (old economy) undergoing a 21st century transformation, but occasionally we'll write on companies that help transform 20th century firms as well. We look for innovations in a business model that will cause a stock to change dramatically. Associated with SA contributor Elijah Buell.Analyst’s Disclosure: I/we have a beneficial lo ...