The earnings call reflects a strong position in AI demand and strategic expansion plans, particularly in the U.S., which are positive indicators. However, there are concerns related to revenue declines in Q1, margin dilution from overseas expansion, and decreased smartphone and IoT revenues. Despite these challenges, the company maintains a strong financial position and has set optimistic guidance for Q2.

Company Guidance -

Q2 2025

During TSMC's first quarter 2025 earnings call, the company provided guidance for the second quarter of 2025, projecting revenue between $28.4 billion and $29.2 billion, representing a 13% sequential increase and a 38% year-over-year increase at the midpoint. Gross margin is expected to be between 57% and 59%, while operating margin is anticipated to be between 47% and 49%. The company also expects to accrue a tax rate of around 20% for the second quarter due to taxes on undistributed retained earnings, with a full-year tax rate forecasted between 16% and 17%. TSMC noted potential impacts on margins due to overseas fab expansions, particularly in Arizona, contributing to a 2% to 3% margin dilution impact for the full year, potentially widening to 3% to 4% in the latter stages of their five-year expansion plan. Despite these challenges, TSMC remains confident in achieving a long-term gross margin of 53% or higher, supported by its technology leadership and strategic expansions.

Strong AI Demand and Revenue Growth

AI-related demand continues to grow robustly, with revenue from AI accelerators expected to double in 2025. The company is working to double CoWoS capacity to meet strong demand.

Revenue Guidance for Q2 2025

TSMC expects Q2 2025 revenue to be between $28.4 billion and $29.2 billion, which represents a 13% sequential increase or a 38% year-over-year increase at the midpoint.

Advanced Technology Contributions

3-nanometer process technology contributed 22% of wafer revenue in Q1, while 5-nanometer and 7-nanometer accounted for 36% and 15%, respectively. Advanced technologies accounted for 73% of wafer revenue.

Expansion Plans in the U.S.

TSMC announced an additional $100 billion investment plan to expand its capacity in Arizona, including three additional wafer manufacturing fabs and a major R&D center.

Strong Financial Position

TSMC ended Q1 with cash and marketable securities of TWD2.7 trillion (approximately $81 billion).

TSMC (TSM) Earnings, Revenues Date & History

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TSM Earnings History

Report Date	Fiscal Quarter	Forecast / EPS	Last Year's EPS	EPS YoY Change	Slides	Play Transcript
Jul 17, 2025	2025 (Q2)	2.33 / -	1.466	―	―	―
Apr 17, 2025	2025 (Q1)	2.07 / 2.14	1.345	59.33% (+0.80)
Jan 16, 2025	2024 (Q4)	2.19 / 2.19	1.458	50.48% (+0.74)
Oct 17, 2024	2024 (Q3)	1.79 / 1.95	1.258	55.01% (+0.69)
Jul 18, 2024	2024 (Q2)	1.41 / 1.47	1.128	29.96% (+0.34)
Apr 18, 2024	2024 (Q1)	1.30 / 1.34	1.303	3.22% (+0.04)
Jan 18, 2024	2023 (Q4)	1.39 / 1.46	1.874	-22.20% (-0.42)
Oct 19, 2023	2023 (Q3)	1.16 / 1.26	1.698	-25.91% (-0.44)
Jul 20, 2023	2023 (Q2)	1.07 / 1.13	1.529	-26.23% (-0.40)
Apr 20, 2023	2023 (Q1)	1.21 / 1.30	1.349	-3.41% (-0.05)

The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.

Beat

Missed

TSM Earnings-Related Price Changes

Report Date	Price 1 Day Before	Price 1 Day After	Percentage Change
Apr 17, 2025	$151.25	$151.32	+0.05%
Jan 16, 2025	$205.60	$213.54	+3.86%
Oct 17, 2024	$185.93	$204.14	+9.79%
Jul 18, 2024	$169.29	$169.96	+0.40%

Earnings announcements can affect a stock’s price. This table shows the stock's price the day before and the day after recent earnings reports, including the percentage change.