TSMC quarterly profit seen soaring to record but Trump tariffs, forex a concern
TAIPEI (Reuters) -TSMC, the world's main producer of advanced AI chips, is expected to post a 52% jump in second-quarter profit to record levels, though U.S. tariffs and a strong Taiwan dollar could weigh on its outlook.
Artificial intelligence-related demand continues to boom and while foundry industry revenue will probably grow 17% to 18% this year, sales for TSMC, by virtue of its market-leading position, will likely expand closer to 30%, said Mario Morales, group vice president at research firm IDC.
Taiwan Semiconductor Manufacturing Co, the world's largest contract chipmaker and a key supplier to Nvidia and Apple, is forecast to report net profit of T$377.4 billion ($12.9 billion) for the three months through June 30, according to an LSEG SmartEstimate compiled from 21 analysts.
SmartEstimates place greater weight on forecasts from analysts who are more consistently accurate.
TSMC has already flagged a rise in second-quarter revenue of 38.6%. Any profit result above T$374.68 billion would mark the company's highest-ever quarterly net income and its sixth consecutive quarter of profit growth.
It remains unclear just how much U.S. President Donald Trump's tariffs will affect TSMC.
Taiwan was threatened with a 32% reciprocal tariff rate in April but has yet to be notified of an updated figure that some countries have received. Trump also said this month that tariffs on semiconductors are likely to come soon.
The company said in June that U.S. tariffs were having some indirect impact, noting they can lead to slightly higher prices, which may in turn weigh on demand.
In March, TSMC announced a $100 billion investment in the U.S. alongside Trump at the White House, on top of $65 billion pledged for three Arizona plants - twoof which have been built.
Another key issue is the Taiwan dollar's 12% appreciation against the greenback so far this year.
"The exchange rate is a bigger concern as so much TSMC revenue is in USD," said Dan Nystedt, vice-president at TriOrient, an Asia-based private investment firm.
TSMC has said a 1% appreciation in the Taiwan dollar typically reduces its gross margin by 0.4 percentage points. In June, the company said the Taiwan dollar's appreciation had shaved more than 3 percentage points off its gross margin.
The company is due to report on Thursday and will provide third-quarter guidance during an earnings call scheduled for 0600 GMT.
Shares in TSMC surged some 80% last year but have climbed just 3.7% for the year to date on worries about tariffs and unfavourable currency rates.
($1 = 29.2610 Taiwan dollars)
(Reporting by Wen-Yee Lee; Editing by Ben Blanchard and Edwina Gibbs)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
an hour ago
- The Sun
Paragon Globe eyes strong growth from industrial, residential segments
PETALING JAYA: Johor-based property developer Paragon Globe Bhd is positioning itself for sustained growth in the industrial and residential sectors, supported by strategic projects and the state's buoyant economic prospects, following a record-breaking financial performance in its recently concluded financial year. For the financial year ended March 31, 2025, Paragon Globe achieved a net profit of RM105.6 million, reversing the previous year's net loss of RM1.2 million. Revenue surged to RM306.3 million from RM51 million the year before, primarily driven by strategic land disposals and robust industrial property sales. Paragon Globe executive chairman Datuk Seri Edwin Tan Pei Seng said the strong performance was largely attributable to a RM337.3 million disposal of 67.6 acres of industrial land at Desa Cemerlang to Bridge Data Centres. 'Apart from strategic land sales, we experienced high demand for industrial developments at Pekan Nenas, significantly contributing to our earnings,' he added. 'Looking ahead, our growth will be underpinned by residential launches such as Calia Residences and The Iconic at Stulang Laut, along with continued industrial projects.' Paragon Globe recently opened its flagship RM10 million PGB Experience Gallery in Johor Bahru, aimed at enhancing customer engagement and centralising sales activities across its diverse project portfolio. Tan highlighted the strategic advantage of Paragon Globe's industrial projects – Desa 27 and Desa 100 – which are ideally located to leverage the Johor-Singapore Special Economic Zone (JS-SEZ). These projects have attracted prominent multinational tenants, including Hunter Amenities International and Meiban Technologies. Despite global economic uncertainties, Tan expressed optimism about Johor's property sector, buoyed by initiatives such as the JS-SEZ and the Johor-Singapore Rapid Transit System Link. 'PGB remains committed to resilience, diversification, and sustainability, positioning ourselves to adapt swiftly and effectively to market changes,' Tan said. On shareholder returns, he said the company was actively reviewing its capital allocation strategy, including the possible introduction of a structured dividend policy, balancing prudent reinvestments with shareholder rewards. 'Despite global economic uncertainties, we remain optimistic about Johor's property market outlook, driven by sustained regional growth initiatives. PGB remains committed to resilience, diversification, and sustainability, positioning ourselves to adapt swiftly and effectively to market changes,' concluded Tan.
The Star
2 hours ago
- The Star
X hit by complaints to EU over user data and targeted advertising
FILE PHOTO: X logo, EU flag and Judge gavel are seen in this illustration taken, August 6, 2024. REUTERS/Dado Ruvic/Illustration/File Photo BRUSSELS (Reuters) -Elon Musk's X social media platform has been hit by complaints by nine civil society organisations to EU and French regulators over what they say is its use of users' data for targeted advertising that may breach EU tech rules. The organisations - AI Forensics, the Centre for Democracy and Technology Europe, Entropy, European Digital Rights, Gesellschaft für Freiheitsrechte e.V. (GFF), Global Witness, Panoptykon Foundation, Stichting Bits of Freedom and VoxPublic said they took their complaint to the European Commission and the French media regulator Arcom on Monday. They urged both regulators to take action under the Digital Services Act (DSA) which prohibits advertising based on sensitive user data such as religion, race and sexuality. X, the Commission and Arcom did not immediately respond to emailed requests for comment. "We express our deep concern regarding the use by X of users' sensitive personal data for targeted advertisements," the organisations said in a statement. They said their concerns were triggered after they looked into X's Ad Repository which is a publicly available database set up by companies as part of a DSA requirement. "We found that major brands as well as public and financial institutions engaged in targeted online advertising based on what appear to be special categories of personal data, protected by Article 9 of the GDPR, such as political opinions, sexual orientation, religious beliefs and health conditions," they said. The group called on the regulators to investigate X. GDPR refers to the EU data privacy law. (Reporting by Foo Yun CheeEditing by Alexandra Hudson)
New Straits Times
2 hours ago
- New Straits Times
Trump announces Indonesia 'deal' after tariff threats
WASHINGTON: US President Donald Trump said Tuesday that he had struck a deal with Indonesia – without providing specifics of the agreement – a week after threatening steeper tariffs on the Southeast Asian country. "Great deal, for everybody, just made with Indonesia," Trump wrote on his Truth Social platform, saying that he worked with the country's president directly. "DETAILS TO FOLLOW!!!" The Trump administration has been under pressure to finalise trade pacts after promising a flurry of deals, as countries have sought negotiations with Washington to avoid Trump's tariff threats. But the US president has so far only unveiled deals with Britain and Vietnam, alongside an agreement to temporarily lower tit-for-tat levies with China. Last week, Trump renewed his threat of a 32 per cent levy on Indonesian goods, saying in a letter to the country's leadership that this level would take effect August 1. It remains unclear what Indonesia's new tariff level will be under the latest deal with Washington, Indonesia's former vice minister for foreign affairs, Dino Patti Djalal, told a Foreign Policy event Tuesday. But he added that insiders from the Indonesian government indicated they were happy with the new deal, adding that he expected further information in the coming hours. Trump, in April, imposed a 10 per cent tariff on almost all trading partners, while announcing plans to eventually hike this level for dozens of economies, including the European Union and Indonesia. However, just days before the steeper duties were due to take effect, he pushed the deadline back from July 9 to August 1. This marked his second postponement of the elevated levies. Instead, since the start of last week, Trump began sending out letters to partners, setting out the tariff levels they would face come August. The levy he cited to Indonesia last week was unchanged from the figure first unveiled in April. To date, Trump has sent more than 20 such letters to partners including the EU, Japan, South Korea and Malaysia. Canada and Mexico – both countries that were not originally targeted in Trump's "reciprocal" tariff push – also received similar documents outlining updated tariffs for their products. However, existing exemptions covering goods entering the United States under a North American trade pact are expected to remain in place. Analysts have warned that without trade agreements, Americans could conclude that Trump's strategy to reshape US trading ties with the world has not worked. "In the public's mind, the tariffs are the pain, and the agreements will be the gain. If there are no agreements, people will conclude his strategy was flawed," William Reinsch, senior adviser at the Center for Strategic and International Studies, previously told AFP.
