Taiwan Semiconductor Manufacturing Co. Ltd. TSM remains optimistic despite ongoing geopolitical tensions. CEO CC Wei stated that customer behavior has not changed, even amid recent challenges such as the Nvidia Corporation NVDA H20 chip facing clamdown and tariff-related uncertainties.
What Happened: During TSMC’s first-quarter earnings call on Thursday, Bruce Lu from Goldman Sachs asked about how ongoing geopolitical risks, such as the restrictions on Nvidia’s H20, are affecting TSMC’s business.
Earlier this week, it was revealed that Nvidia was notified by the Donald Trump administration on April 9 that selling its H20 chip to China would now require an export license.
“We do not comment on specific customer product, but let me assure you that we have taken this into consideration when providing our full-year growth outlook,” TSMC CEO Wei responded to the concern raised by Lu.
Bruce then asked for more specific information, wondering how much flexibility TSMC has in their production planning and how well they can handle these potential challenges.
Wei reassured him that, while there’s a lot of speculation around the situation, TSMC is closely monitoring the impact of these risks, especially the new tariffs.
However, they haven’t seen any change in how their customers are behaving, meaning they’re still moving forward with their planned business forecast as expected.
“We have not seen any change in our customers’ behavior so far. And so we stick to our forecast,” he concluded.
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Why It’s Important: TSMC, a key supplier of chips for Nvidia’s GPUs and Apple Inc.’s AAPL iPhones, reported first-quarter net sales of $25.53 billion (NT$839.25 billion), marking a 41.6% increase year-over-year and surpassing analysts’ expectations of $23.92 billion.
However, sales were down 3.4% compared to the previous quarter.
For the second quarter of 2025, the company expects revenue to range between $28.4 billion and $29.2 billion, ahead of the $26.79 billion consensus estimate. It also projects a gross margin of 57% to 59% and operating margins between 47% and 49%.
The geopolitical landscape has been turbulent, with President Trump previously threatening tariffs up to 100% on TSMC if it does not manufacture in the U.S.
Meanwhile, China’s new rule reportedly exempts chips designed by U.S. companies but manufactured in Taiwan from its 125% retaliatory tariffs. This rule has also exempted TSMC.
Price Action: TSMC shares edged up 0.046% on Thursday and added another 0.29% in after-hours trading, reaching $152.19. Despite the recent uptick, the stock remains down 24.72% year-to-date, according to Benzinga Pro.
The chipmaker currently holds a strong growth score of 81.99%, as per Benzinga Edge Stock Rankings. Click here to see how it compares with other top names in the semiconductor industry.
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