Citi's latest report highlights Taiwan Semiconductor Manufacturing Company (TSMC) (TSM, Financial) achieving impressive first-quarter results, exceeding market expectations. The company reported a 60% year-on-year increase in net profit, reaching 361.6 billion New Taiwan dollars, with a gross margin of 58.8%. Despite growing uncertainties in the macroeconomic environment and tariffs, TSMC's management has not observed any changes in customer orders. They have maintained a sales growth forecast of approximately 25% annually by 2025 and capital expenditure budget between $38 billion and $42 billion.
Furthermore, TSMC's management clarified that they have not engaged in discussions regarding joint ventures, technology licensing, or sharing with other companies, addressing recent market rumors about collaboration with Intel. The company retains its "Buy" rating from Citi, as most short-term uncertainties are considered priced into the stock. The target price for TSMC on the Taiwan Stock Exchange has been raised from NT$1,050 to NT$1,100.
