Taiwan Semiconductor Manufacturing Company (TSM) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was NT$839.3 billion (US$25.53 billion), up 41.7% year-over-year but down 5.1% sequentially, supported by AI demand and rapid recovery from a major earthquake in Taiwan.

• Net income attributable to shareholders reached NT$361.6 billion, a 60.4% increase year-over-year and a 3.5% decrease sequentially.

• EPS was NT$13.94, up 60.4% year-over-year.

• Gross margin was 58.8%–59%, up 5.7 percentage points year-over-year, slightly down sequentially due to earthquake and overseas fab ramp-up.

• Advanced technologies (7nm and below) made up 73% of wafer revenue; HPC platform grew strongly and now represents 59% of revenue.

Financial highlights

• Operating margin was 48.5%–49%, up 6.5 points year-over-year, down 0.5 points sequentially.

• Net profit margin was 43.1%, up from 38% a year ago.

• Free cash flow in Q1 2025 was NT$294.74 billion, up from NT$255.01 billion in Q1 2024.

• Cash and marketable securities ended at NT$2.7 trillion (US$81B); cash and cash equivalents at period end were NT$2.39 trillion.

• Capital expenditures for Q1 were NT$330.8 billion (US$10.06 billion).

Outlook and guidance

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

• Q2 gross margin guided at 57–59%, operating margin 47–49%; Q2 tax rate ~20%.

• Full-year 2025 revenue expected to grow close to mid-20% YoY in USD, driven by robust AI demand.

• AI accelerator revenue expected to double in 2025; mid-40s% CAGR for AI accelerator revenue over next five years.

• Long-term gross margin target remains at 53%+ despite overseas expansion.