[News] Stronger Taiwan Dollar Weighs on TSMC’s Q3 Outlook: 5 Key Questions Before July 17 Earnings Call

With TSMC’s earnings call scheduled for Thursday (July 17), all eyes are on the impact of the stronger Taiwan dollar, capex plans, and progress in advanced processes and packaging. However, Economic Daily News and Commercial Times point to a cautious Q3 outlook, factoring in currency headwinds. Analysts expect U.S. dollar revenue to grow 3%–7% sequentially, but NT dollar revenue may dip due to currency appreciation, according to the Economic Daily News.

Here are the top 5 key issues raised by analysts ahead of TSMC’s earnings call, along with expectations for its Q3 and full-year performance.

Currency Impact on Margins

According to Commercial Times, currency strength and tariff risks could be TSMC’s top concerns. Analysts cited in the report warn that the Taiwan dollar’s 10% gain in Q2 may limit upside in Q2 profits. Meanwhile, Economic Daily News suggests that TSMC’s gross (57-59%) and operating margins (47-49%) in the second quarter are expected to land near the lower end of its guidance range.

On the other hand, analysts cited by Commercial Times note that TSMC’s gross margin in the second half may further slip to 55–56%.

2025 Capex Cautious; 2026 Set for Growth Surge

Amid global uncertainty and rising tariff concerns, Economic Daily News suggests TSMC is taking a cautious stance on 2025 capex, likely landing near the low end of its range at around $38 billion, reflecting mid-20% year-over-year growth.

However, the report adds that looking ahead, TSMC’s spending in 2026 could surge to $40–45 billion, setting a new record, as TSMC ramps up R&D for sub-1nm technologies, prepares for 2nm mass production, and expands its global footprint.

Progress on Advanced Nodes/ Packaging: Price Hikes Expected

Notably, Economic Daily News highlights that TSMC stands to gain from price hikes on advanced nodes and packaging in 2026, with sub-5nm process prices set to rise 3% year-over-year and CoWoS packaging prices climbing 5%.

As the Economic Daily News reported in April, as its new fab in Arizona has become a pivotal partner in realizing the “Made in America” push by global chipmakers, TSMC is considering raising prices for 4nm chip production at its U.S. facility by as much as 30%, citing robust demand and rising costs.

With TSMC’s 2nm ramping up in the second half of 2025, TSMC is also accelerating its advanced packaging expansion in the U.S. According to MoneyDJ, the company plans to break ground on two U.S. advanced packaging plants by 2028, starting with SoIC (System-on-Integrated-Chips), while Taiwan stays at the forefront of its packaging innovation.

AI Momentum

As per the Economic Daily News, NVIDIA’s GB300 ramping up in the second half will keep TSMC’s high-performance computing (HPC) demand strong. With NVIDIA’s next-gen AI platform Rubin set to launch in 2026, TSMC’s 3nm capacity is expected to remain tight, the report adds.

An analyst cited by Commercial Times adds that robust AI demand could boost TSMC’s full-year U.S. dollar revenue growth close to 30% in 2025.

U.S. Expansion and Larger Tax Credits

On the other hand, under President Trump’s “big, beautiful bill” passed by the Senate, tax credits for semiconductor companies expanding U.S. capacity could jump from 25% to 35%. TSMC is eligible and stands to benefit from the enhanced incentives, as per the Economic Daily News.

While chipmakers will qualify if they begin construction before the 2026 deadline, TSMC stands out to benefit with a clear and ambitious pipeline. According to Commercial Times, TSMC’s second Arizona fab (P2) is set to begin equipment installation as early as Q3 2026, with mass production slated for 2027. Its third Arizona fab, as per the Economic Daily News, had already broke ground in April, 2025.

Read more

• [News] TSMC Reportedly to Break Ground on U.S. Advanced Packaging Plants in 2028, Starting with SoIC
• [News] U.S. Senate Reportedly Eyes 35% Tax Credit for New Chip Fabs, Boosting TSMC, Intel and Samsung

(Photo credit: TSMC)