TSMC Forecasts 54% Profit Surge Amid U.S. Trade Pressure and AI Chip Demand

Taiwan Semiconductor Manufacturing Co (TSMC), the global leader in advanced AI chip production, is expected to report a 54% jump in Q1 net profit on Thursday, driven by surging demand for AI-enabled devices. However, looming trade tensions under U.S. President Donald Trump’s administration cast uncertainty over the company’s outlook.

According to LSEG SmartEstimate, TSMC is projected to post net profit of T$347.8 billion ($10.74 billion) for the January–March quarter, up from T$225.5 billion a year earlier. The chipmaker, which counts tech giants Apple (NASDAQ:AAPL) and Nvidia (NASDAQ:NVDA) among its top clients, is benefiting from the global AI boom but faces escalating pressure from U.S. tariffs and concerns over Taiwan’s chip dominance.

Trump has threatened up to 100% tariffs on TSMC if it fails to localize production in the U.S., despite praising the firm’s technological leadership. Last month, TSMC announced a $100 billion investment with Trump at the White House, adding to $65 billion already pledged for Arizona-based factories.

Analysts predict TSMC will continue expanding its overseas fab capacity to offset geopolitical risk, though this could slightly dent gross margins. “This move ensures favorable treatment from Washington and limits potential tariff exposure,” said Sravan Kundojjala of SemiAnalysis.

TSMC recently posted stronger-than-expected Q1 revenue in Taiwan dollars. On Thursday’s earnings call, the company will provide an updated outlook in U.S. dollars and announce its full-year capital expenditure, expected to reach up to $42 billion—up 41% year-over-year.

With Apple’s China-based iPhone production also under scrutiny, any trade disruption could ripple across TSMC’s supply chain. As AI integration accelerates and global chip policies tighten, TSMC remains a focal point in the semiconductor and geopolitical landscape.