TSMC Q1 profit set to jump, but Trump's policies cloud its future

TSMC, the main global producer of advanced chips used in artificial intelligence applications, is set to report a 57% leap in first-quarter profit on Thursday, though it is also likely to flag risks from U.S. President Donald Trump's trade policies.

The world's largest contract chipmaker, whose customers include Apple and Nvidia, has benefited from a trend towards integrating AI features into online products. But the firm faces headwinds from Trump's import tariffs and his criticism of Taiwan's dominance of the chip industry.

Taiwan Semiconductor Manufacturing Co is expected to report a net profit of T$354.6 billion ($10.92 billion) for the three months ended March 31, according to a LSEG SmartEstimate drawn from 18 analysts. SmartEstimates give greater weighting to forecasts from analysts who are more consistently accurate.

That estimate compares to the 2024 first-quarter net profit of T$225.5 billion.

TSMC has been spending billions of dollars on new factories overseas, though it has said most manufacturing will remain in Taiwan. It announced plans for a $100 billion US investment with Trump at the White House last month, on top of $65 billion pledged for three plants in the state of Arizona.

Trump has both praised Taiwan's chip industry and threatened it with tariffs.

Last week, Trump said he had told TSMC it would have to pay a tax of up to 100% if it did not build factories in the U.S.

The Trump administration is also probing the import of chips, along with pharmaceuticals, in a bid to impose tariffs on both on the grounds that extensive reliance on foreign production of semiconductors and medicine is a national security threat.

TSMC last week reported a surge in first-quarter revenue in Taiwan dollars, slightly ahead of market expectations. The company gives its revenue outlook in U.S. dollars on its quarterly earnings call, scheduled for 0600 GMT on Thursday.

It will also update its outlook for the current quarter as well as for the full year, including planned capital expenditure for production increases.

On its last earnings call in January, TSMC said it expected capital spending this year of $38 billion to $42 billion, an increase of as much as 41% from last year.

While the AI boom had previously helped to drive up TSMC's stock price, shares have dropped 20% so far this year given uncertainty about U.S. trade and tariff policies.

In Taiwan, the company is so important to the export-oriented economy it is often colloquially referred to as the "sacred mountain protecting the country".