Amidst escalating global trade tensions and evolving AI demand, semiconductor giants TSMC (TSM, Financial) and ASML (ASML) are set to release their financial reports. Investors are keenly observing their forecasts to assess the impact of US-China trade disputes and the sustainability of the AI boom. TSMC has seen its stock price slumped about 20% and ASML about 12% since the start of the year.
Despite expected revenue growth this quarter, focus remains on the companies' forecasts for the next quarter. Analysts suggest that given the uncertain trade environment, TSMC and ASML might withdraw their financial guidance. Valuations have adjusted to account for negative trends, yet without clearer policies, rapid recovery remains unlikely.
A temporary relief came when the Trump administration exempted certain electronics from tariffs, benefiting companies like Apple (AAPL) and its suppliers, including TSMC. However, these are short-term measures, with new investigations paving the way for future tariffs. The semiconductor sector, being highly cyclical, faces amplified risks from potential global economic slowdowns.
Internally, TSMC and ASML face challenges. TSMC's possible collaboration with Intel (INTC) and a significant US investment commitment raise strategic and profitability concerns. For ASML, client Intel's unclear capital expenditure plans and Samsung's production hurdles add uncertainty.
