TSMC stands firm on 2025 growth outlook despite US-China trade war

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading contract chipmaker, has maintained its optimistic growth forecast for 2025 despite mounting geopolitical tensions between the United States and China. 

The company anticipates a doubling of AI revenue and growth of between 20 and 30 percent this year 

TSMC has also maintained its capital spending projection of $38 billion to $42 billion for 2025. The company’s CEO, C. C. Wei, stated that high-end chips essential to artificial intelligence development were still in high demand. Wei added that TSMC will carefully monitor any possible effects on market demand.

TSMC surpasses earnings forecast 

Taiwan Semiconductor Manufacturing Company reported better-than-expected quarterly earnings shortly after customers rushed to stockpile cutting-edge chips in anticipation of global trade disruptions that US tariffs sparked.

During that period, the primary chipmaker for Nvidia Corp. and Apple Inc. reported a March-quarter net income of NT$361.6 billion ($11.1 billion). TSMC, on the other hand, reported a better-than-expected 42% increase in revenue for that period, partly due to the US stockpiling of laptops, smartphones, and other electronics in anticipation of a possible trade war.

Reports indicate that investors are closely watching TSMC’s upcoming presentation. Their main focus is on the company’s revenue and spending projections for 2025, which executives are expected to unveil soon.

However, despite this tremendous increase in revenue and the company’s forecasted growth prospects for this year, the worldwide technology industry is experiencing a state of anxiety. 

This had been brought about following a tumultuous few days in which the US restrictions on the export of Nvidia chips to China and a disappointing report from ASML Holding NV lowered the outlook for semiconductors. These two key players recently saw a $200 billion decline in market value.

Meanwhile, the market is still concerned about how tariffs would affect the global economy and the semiconductor sector, which provides critical components to almost every industry worldwide. 

Economists are lowering their predictions for global GDP growth due to Trump’s trade war, raising concerns about the future of everything from computing to iPhone demand.

Analysts flag risks to TSMC’s 2025 outlook as trade pressures mount

Following the growing anxiety in the tech sector, analysts have questioned whether major tech companies like Microsoft Corp. and Meta Platforms Inc. would continue to purchase Nvidia chips at the same rate in 2025, even before Washington imposed additional tariffs on a large portion of the world which were later quickly reversed. 

The elevated uncertainty was elaborated in a recent statement by analysts Steven Tseng and Charles Shum.

Based on the statement, although ASML’s orders of Є1.2 billion for EUV (extreme ultraviolet) systems during the first quarter set a new 83-year-over-year high, the growth trajectory of TSMC remained unclear. This was likely due to TSMC’s capacity expansion and a low comparison base.

The statement continued that for TSMC’s major customers, such as Nvidia and Apple, the US export controls on some AI chips (like the Nvidia H20) and potential tariffs applying to semiconductor imports created a significant demand barrier. As a result, those obstacles could eventually hinder TSMC’s ability to ramp up capacity and grow revenue as planned.

Analysts, therefore, question whether TSMC will change its mid-20% sales growth forecast for 2025 in light of all the uncertainty. 

In addition, investors will be looking for any changes in spending plans after TSMC unexpectedly announced an additional $100 billion US investment.

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