TSMC Q1 revenue climbs 42% to $25.6bn amid AI chip demand

TSMC has reported revenue of $25.6bn for Q1 2025. (Photo: Jujumin Chu/Shutterstock)

Taiwan Semiconductor Manufacturing Company (TSMC) recorded consolidated revenue of $25.6bn for the first quarter of 2025 (Q1 2025), a 42% increase compared to the same period last year. The result slightly exceeded analyst expectations and was within the company’s previously issued guidance range of $25bn to $25.8bn, reported Reuters.

The company had indicated earlier that the lower end of the range might be met due to a revenue impact of $161m following an earthquake in Taiwan in January. Nevertheless, demand for advanced chips remained strong throughout the quarter, particularly in AI and high-performance computing.

March 2025 revenue stood at $8.8bn, a 10% increase over February and a 46.5% rise from March 2024. February revenue was $8bn. The strong March performance contributed significantly to the company’s quarterly momentum.

TSMC is expected to release its full Q1 earnings report on 17 April, which will include margin, net income, and second-quarter guidance. The Q1 update follows strong results in the previous quarter, where the company reported $26.3bn in revenue for Q4 2024, a 34.4% year-on-year rise. For the full year 2024, TSMC posted $88bn in revenue, the company’s highest annual total since becoming a public company in 1994.

How AI demand is sustaining TSMC’s performance

Growth in recent quarters has been driven by continued demand for semiconductors used in AI and data infrastructure. TSMC remains a key supplier to global technology firms, including Apple and Nvidia. While consumer electronics demand has tapered off post-pandemic, demand from AI workloads and data centres has helped offset the decline.

TSMC shares have experienced volatility following recent developments in US trade policy. After US President Donald Trump recently announced broad-based import tariffs, the company’s Taipei-listed stock dropped in line with the broader TWII index. However, a pause in tariff implementation led to a 9.9% rebound in TSMC’s stock price. The company’s shares are down 19.7% year-to-date, in line with the index’s 17.5% decline. Semiconductors have not yet been included in the latest tariff list.

Alongside its earnings performance, TSMC is pursuing strategic capacity expansion. Last month, the company announced an additional $100bn investment in its US operations in Phoenix, Arizona, raising its total US investment commitment to $165bn. The expanded plan includes three fabrication plants, two advanced packaging sites and a research and development facility. The project is expected to generate 40,000 construction jobs and over $200bn in economic output over the next decade.

At a recent Republican National Congressional Committee event, President Trump stated that he had informed TSMC that it could face tariffs of up to 100% if it did not proceed with building its planned semiconductor facilities within the US. Trump also criticised the previous administration under Joe Biden for allocating a $6.6bn grant to TSMC’s US subsidiary as part of the CHIPS and Science Act funding. He said semiconductor manufacturers did not require such financial support from the government. Separately, reports surfaced that the Taiwanese firm could be hit with a penalty of over $1bn in connection with a US export control investigation. The inquiry focuses on a chip developed by Chinese company Sophgo and produced by TSMC, which is said to resemble a component used in Huawei’s Ascend 910B AI processor.

Read more: TSMC opens new 2nm fab in Taiwan