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TSMC held its Q1 earnings call today (17th), forecasting Q2 revenue to grow 11–14% QoQ, reaching between USD 28.4 billion and USD 29.2 billion.
Based on the exchange rate assumption of 1 USD to 32.5 NT dollars, gross margin is expected to hold steady at 57–59%, while operating margin will likely land between 47–49%.
However, TSMC also flagged concerns about how rising tax rates and overseas expansion could weigh on gross margins. CFO Wendell Huang said the company expects a 20% tax rate in Q2, easing to 14–15% in Q3 and Q4, and averaging 16–17% for all of 2025.
As for its new plants in Kumamoto and Arizona, TSMC expects a 2–3% margin hit this year, with the impact gradually widening. During early ramp-up, gross margin dilution is projected at 2–3% annually, increasing to 3-4% in later stages over the next five years.
TSMC anticipates capital expenditures for 2025 to be in the range of USD 38-42 billion. Among this, 70% will be allocated to advanced process development, 20-30% to specialty technology, and 10-20% to packaging, testing, and other areas.
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(Photo credit: TSMC)
