TSMC (TSM) Upbeat on Growth, Cautions on Tariff Impact

by MarketNewsData

TSMC (TSM) remains highly optimistic about its growth trajectory, citing tight capacity across nodes, robust AI-driven demand, and ongoing expansion both domestically and internationally. However, it also flagged caution around tariffs and currency impacts in the near term.

🔑 Key Takeaways

  • Strong AI-Driven Demand
    • “Demand from AI is getting stronger and stronger.”
    • N3, N5, and future N2 demand remains “very high.”
    • N3 capacity expected to “continue to be tight in coming years.”
  • Technology & Capacity Highlights
    • N2 development is “right on track” and more profitable than N3.
    • Volume production of N2 is expected in H2 2025.
    • TSMC is leveraging N7 capacity to support N5.
    • CoWoS (advanced packaging tech) remains a focus: “Trying very hard to narrow the gap, now and for 2026.”
  • Capacity & Capex Planning
    • “Our capacity is very very tight.”
    • Capex remains steady: $38–42B forecast for 2025.
    • Company is “mindful of macro uncertainty” and tariff risks when planning capital expenditures.
    • “Unlikely to see Capex suddenly drop a lot.”
  • Financial Outlook
    • 2025 revenue growth revised upward to ~30% in USD terms (from “close to mid-20%” previously).
    • Q3 revenue guidance: $31.8B–$33B (vs. $23.5B YoY).
    • Q3 gross margin: 55.5%–57.5% (vs. 58.6% in Q2).
    • Q3 operating margin: 45.5%–47.5% (vs. 49.6% in Q2).
    • Still “confident in 53% or higher gross margin” longer term.
  • Global Expansion & Strategic Position
    • Plans to build 11 wafer fabs in Taiwan over the coming years.
    • 5th and 6th fabs in Arizona to use more advanced technologies.
    • Arizona volume production being accelerated.
    • Japan’s second fab construction starts later this year.
    • Dresden, Germany fab progressing smoothly.
    • “We are a key partner of U.S. chip industry.”
  • Macro & Geopolitical Concerns
    • TSMC is “more conservative about Q4 due to tariffs and other uncertainties.”
    • Taiwan dollar appreciation and forex fluctuations will impact margins.
    • No change seen yet in customer behavior, but “there is risk and uncertainty from tariffs.”
  • NVIDIA H20 Update
    • “We have not received a signal yet on NVIDIA H20, but certainly is good news” (in reference to China shipment approval).

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