Q1 2025 Taiwan Semiconductor Manufacturing Co Ltd Earnings Call Transcript
Key Points
- TSMC's first quarter revenue was slightly above the midpoint of guidance despite challenges such as smartphone seasonality and an earthquake.
- Advanced technologies, defined as 7-nanometer and below, accounted for 73% of wafer revenue, indicating strong demand for cutting-edge processes.
- TSMC expects a 13% sequential increase in second-quarter revenue, driven by strong demand for 3-nanometer and 5-nanometer technologies.
- The company plans to double its CoWoS capacity in 2025 to meet robust AI-related demand, indicating confidence in future growth.
- TSMC announced an additional $100 billion investment plan to expand its capacity in Arizona, demonstrating commitment to meeting customer demand and geographic flexibility.
- First quarter revenue decreased 3.4% sequentially in NT dollars, impacted by smartphone seasonality.
- Gross margin decreased by 0.2 percentage points due to the earthquake and overseas dilution, with further margin dilution expected from overseas fabs.
- Operating margin decreased by 0.5 percentage points sequentially to 48.5%, reflecting operational challenges.
- TSMC anticipates a 2% to 3% margin dilution impact for the full year 2025 due to overseas fab costs, which could widen to 3% to 4% in later years.
- There are uncertainties and risks from potential tariff policies, which could impact end-market demand and revenue growth.
(spoken in foreign language)
good afternoon, everyone, and welcome to TSMC's first quarter 2025 earnings conference call. This is Jeff Su, TSMC's Director of Investor Relations and your host for today.
TSMC is holding our earnings conference call via live audio webcast through the company's website at www.tsmc.com, where you can also download the earnings release materials. If you are joining us through the conference call, your dial-in lines are in listen-only mode.
The format for today's event will be as follows: First, TSMC's Senior Vice President and CFO, Mr. Wendell Huang, will summarize our operations in the first quarter 2025, followed by our guidance for the second quarter 2025. Afterwards, Mr. Huang and TSMC's Chairman and CEO, Dr. C.C. Wei, will jointly provide the company's key messages. Then we will open the line for questions and answers.
As usual, I would like to remind everybody that today's discussions may
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