Taiwan Semiconductor Manufacturing Co (TSMC) is expected to post a record-breaking 52% increase in second-quarter profit, fueled by strong global demand for artificial intelligence chips. However, new US tariffs and a stronger Taiwan dollar could impact the company’s future outlook.
TSMC, the world’s largest contract chipmaker and a key supplier to companies like Nvidia and Apple, is forecast to report a net profit of T$377.4 billion (around $12.9 billion) for the quarter ending June 30, based on estimates from 21 analysts. Any figure above T$374.68 billion would mark the highest quarterly profit in the company’s history and its sixth straight quarter of profit growth.
The company has already reported a 38.6% rise in second-quarter revenue. Industry experts expect global foundry revenue to grow around 17% to 18% this year, but TSMC is projected to see closer to 30% growth due to its market dominance in AI chip manufacturing.
Despite this strong performance, uncertainty remains around US tariff policy. Taiwan was threatened with a 32% reciprocal tariff rate earlier this year but has not yet received an updated figure. President Donald Trump recently stated that tariffs on semiconductors are likely to be introduced soon. In June, TSMC said US tariffs are having some indirect effects, such as pushing prices slightly higher, which could hurt demand.
The company’s massive investments in the US also remain in focus. In March, TSMC announced a $100 billion investment alongside Trump at the White House, in addition to $65 billion previously committed to three plants in Arizona, two of which are already built.
Another challenge is the appreciation of the Taiwan dollar, which has strengthened 12% against the US dollar this year. “The exchange rate is a bigger concern as so much TSMC revenue is in USD,” said Dan Nystedt, vice-president at an Asia-based private investment firm.
TSMC has stated that every 1% rise in the Taiwan dollar typically cuts its gross margin by 0.4 percentage points. In June, the company revealed that the stronger currency had already reduced its margin by over 3 percentage points.
TSMC will release its earnings report on Thursday and is expected to provide third-quarter guidance during its earnings call at 0600 GMT.
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