Taiwan Semiconductor Manufacturing Company (TSM) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was NT$839.25 billion (US$25.53 billion), up 41.6% year-over-year but down 5.1% sequentially, impacted by smartphone seasonality but supported by AI demand and rapid recovery from a major earthquake in Taiwan.

• Net income attributable to shareholders was NT$361.56 billion, a 60.3% increase year-over-year and a 3.5% decrease sequentially.

• EPS for Q1 was NT$13.94, up 60.4% year-over-year; ROE reached 32.7%.

• Gross margin was 58.8%, up 5.7 percentage points year-over-year but down 0.2 points sequentially, impacted by earthquake and overseas fab ramp-up; operating margin was 48.5%.

• Advanced technologies (7nm and below) contributed 73% of wafer revenue; HPC platform revenue rose, while smartphone revenue fell.

Financial highlights

• Q1 gross margin: 58.8% (up 5.7pp YoY, down 0.2pp QoQ); operating margin: 48.5% (up 6.5pp YoY, down 0.5pp QoQ).

• Net profit margin was 43.1%, up 5.1 percentage points year-over-year.

• Free cash flow in Q1 was NT$294.74 billion, up from NT$255.01 billion in Q1 2024.

• Cash and marketable securities stood at NT$2.7T (US$81B) at quarter-end.

• Q1 capital expenditures totaled US$10.06 billion.

Outlook and guidance

• Q2 2025 revenue expected at US$28.4B–$29.2B, up 13% sequentially and 38% YoY at midpoint.

• Q2 gross margin guidance: 57–59%; operating margin: 47–49%.

• Full-year 2025 revenue expected to grow close to mid-20% in USD terms, outpacing industry growth.

• AI accelerator revenue projected to double in 2025; AI-related CAGR forecast at mid-40s% for 2024–2028.

• Full-year tax rate expected at 16–17%.