[News] TSMC Reportedly Asks Suppliers for Revised Quotes, Aiming for 30% Cost Cut Amid TWD Surge

The recent sharp appreciation of the New Taiwan Dollar (TWD) has sparked concerns across Taiwan’s export-driven semiconductor and electronics sectors, with investors closely watching whether TSMC’s margins and revenues will be squeezed by foreign exchange losses. According to a TechNews report citing industry sources, TSMC has already asked its suppliers to submit cost-reduction plans in response to the strengthening local currency.

TechNews reports that TSMC is pushing its supply chain to present cost-cutting proposals for the second half of the year to offset the currency headwinds. Previously, the foundry giant had already asked suppliers to cut raw wafer prices by at least 30% for next year. But with exchange rate pressures mounting, TSMC has reportedly broadened its demands—requiring several suppliers to submit revised quotes by the end of this month. Many suppliers are said to be under considerable stress as a result, the report suggests.

The New Taiwan Dollar has surged in value over a short span, climbing from around 33 to the U.S. dollar just a month ago to breaking the 30 mark—and even briefly touching 29. While Taiwan’s central bank maintains that the U.S. Treasury has made no formal request for a currency revaluation, South Korea’s central bank governor, Rhee Chang-yong, recently pointed to growing U.S. pressure on Asian countries to let their currencies strengthen as a major driver behind the region’s recent exchange rate movements.

According to TechNews, analysts warn that each 1% appreciation of the New Taiwan Dollar could erode TSMC’s operating margin by approximately 0.4 percentage points. For the second quarter of 2025, TSMC has forecast consolidated revenue between US$28.4 billion and US$29.2 billion, based on an assumed exchange rate of TWD 32.5 to the U.S. dollar. Under this assumption, the company expects gross margins of 57% to 59% and operating margins ranging from 47% to 49%. However, continued strengthening of the TWD may exert downward pressure on margins, posing a potential risk to TSMC’s quarterly performance, the report adds.

In response to inquiries about the currency issue, TSMC stated it has not made any changes to its guidance for the second quarter or full-year 2025 and will continue to closely monitor exchange rate fluctuations, as per TechNews.

Read more

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(Photo credit: TSMC)