TSMC surpasses Q1 targets driven by AI chip sales.
Taiwan Semiconductor Manufacturing (TSM) outperformed expectations for the first quarter due to high demand for AI chips. TSM stock surged in response to the announcement.
TSMC, the world’s top contract chip manufacturer, earned $2.12 per US share on $25.53 billion in revenue in the March quarter. FactSet analysts projected TSMC to earn $2.07 per share on sales of $25.46 billion. Year over year, TSMC’s earnings jumped by 58%, while sales increased by 39%.
TSMC estimates revenue to range between $28.4 billion and $29.2 billion in the current quarter. The midpoint of $28.8 billion exceeded Wall Street’s expectations of $26.92 billion. It made $20.66 billion in revenue during the first quarter of last year.
“Our business in the first quarter was impacted by smartphone seasonality, partially offset by continued growth in AI-related demand,” CFO Wendell Huang stated.
“Moving into second quarter 2025, we expect our business to be supported by strong demand for our industry-leading 3-nanometer and 5-nanometer technologies,” according to him. Circuit widths on chips are measured in nanometres, which are one billionth of a metre.
In the first quarter, shipments of 3-nanometer chips accounted for 22% of TSMC’s total wafer revenue and 5-nanometer chips accounted for 36%. Advanced technologies, defined as 7-nanometer and smaller nodes, accounted for 73% of total wafer revenue.
TSM Stock Rises After Q1 Report
On the stock market today, TSM stock climbed a fraction to close at 151.74.
TSMC produces chips for AMD (AMD), Apple (AAPL), Broadcom (AVGO), Qualcomm (QCOM), Nvidia (NVDA) and more.
TSMC maintained its full-year outlook, but its strong Q2 guidance implied a conservative stance for the rest of the year, Barclays analysts said in a client note. Taiwan Semiconductor faces uncertainty related to tariffs and the macroeconomic picture. Barclays rates TSM stock as overweight, or buy, with a price target of 255.
TSMC’s outlook “appears somewhat foggy beyond the next 90 days,” Needham analyst Charles Shi said in a client note. He rates TSM stock as buy with a price target of 225.
TSM stock ranks second out of 31 stocks in IBD’s semiconductor manufacturing industry group, according to IBD Stock Checkup. Taiwan Semiconductor has a middling IBD Composite Rating of 65 out of 99.
