TSMC's earnings call presents a positive outlook, while ASML's orders drop by 45%, leading to uncertainty in the semiconductor market.
TSMC will hold an investor conference on April 17, with the market's attention on its operational outlook for 2025. Despite geopolitical and tariff pressures, TSMC's first-quarter revenue increased by 42% compared to the same period last year, with a gross margin of 57.3%. At the same time, ASML saw a 45% drop in new orders in the first quarter, indicating a conservative approach to equipment investment. In anticipation of potential U.S. tariffs, several major tech companies have increased their orders with TSMC ahead of time. Taiwan's equipment spending has dropped by 16%, reflecting a slowdown in investments for new capacity.
Key Updates
04/16 15:48
TSMC's earnings call presents a positive outlook, while ASML's orders drop by 45%, leading to uncertainty in the semiconductor market.
TSMC will hold an investor conference on April 17, with the market's attention on its operational outlook for 2025. Despite geopolitical and tariff pressures, TSMC's first-quarter revenue increased by 42% compared to the same period last year, with a gross margin of 57.3%. At the same time, ASML saw a 45% drop in new orders in the first quarter, indicating a conservative approach to equipment investment. In anticipation of potential U.S. tariffs, several major tech companies have increased their orders with TSMC ahead of time. Taiwan's equipment spending has dropped by 16%, reflecting a slowdown in investments for new capacity.
Ahead of TSMC Earnings Call: Stable Operational Data, AI Demand Supports Growth
TSMC is set to hold its earnings call for the first quarter of 2025 on April 17. According to the preliminary financial report, first-quarter revenue reached NT$839.2 billion, a 42% year-over-year increase, with earnings per share (EPS) at NT$13.1 per share and a gross margin of 57.3%, slightly below the market expectation of 58.2% but still within the forecast range. The impact of wafer losses and reduced capacity utilization due to the earthquake has been factored in, yet overall operations remain stable.
Looking ahead to the second quarter, analysts predict TSMC's revenue will increase by 5.7% quarter-over-quarter, with the gross margin expected to rise to 58.1%. This is mainly due to continued strong AI demand, stabilization of shipments following the earthquake, and seasonal factors boosting capacity utilization. A recent report from Bank of America Securities indicates that despite ongoing tariff and geopolitical risks, TSMC's full-year revenue growth is still expected to reach 25%, though lower than the previous forecast of 30%. If achieved, this would be seen as a "pleasant surprise."
ASML Orders Plunge 45%, Reflecting Conservative Equipment Investment
In contrast to TSMC's positive financial report, global lithography equipment leader ASML announced its first-quarter 2025 financial results on April 16, showing new order amounts of only €3.94 billion, a sharp 44.5% decrease from the previous quarter's €7.088 billion, and well below the market expectation of €4.82 billion. Among these, extreme ultraviolet (EUV) equipment orders were only €1.2 billion, indicating a significant slowdown in high-end equipment investment.
ASML CEO Christophe Fouquet stated that while AI remains a long-term demand driver, some customers are adopting more conservative procurement strategies in response to tariff and geopolitical risks. ASML forecasts full-year 2025 revenue to be between €30 billion and €35 billion, warning that if tariff wars escalate, full-year revenue could fall at the lower end of the forecast range. The gross margin is estimated to be between 51% and 53%, with second-quarter sales expected to be between €7.2 billion and €7.7 billion.
Rising Tariff Pressure Leads Tech Giants to Increase Orders
The U.S. government recently initiated a national security investigation into semiconductor imports under Section 232 of the Trade Expansion Act, which is widely expected to lead to a new round of tariff measures. Facing potential cost increase risks, several tech giants have chosen to increase orders in advance with TSMC. According to market sources, some customers are even considering accepting price increases of up to 30% to ensure stable supply.
During her recent visit to Taiwan, AMD CEO Lisa Su stated that semiconductors are crucial globally. As a U.S. company, AMD supports U.S. government policies while also considering the integrity of its global supply chain. She emphasized that Taiwan is a crucial ecosystem partner for AMD and that they maintain close communication with the U.S. government and suppliers.
Additionally, the local Taiwanese supply chain is benefiting from TSMC's 2nm process entering mass production. AMD's next-generation EPYC server processor "Venice" has already completed tape-out, becoming the first high-performance computing chip to use TSMC's 2nm process, expected to debut in 2026.
Decline in Taiwan's Equipment Spending Reflects Slower New Capacity Investment
According to SEMI, the global semiconductor manufacturing equipment sales totaled $117.1 billion in 2024, a 10% year-over-year increase, setting a new record. However, Taiwan's equipment spending fell 16% to $16.6 billion, indicating a slowdown in new capacity investment. In contrast, China's equipment spending increased 35% to $49.6 billion, maintaining its global lead, while South Korea saw a slight growth of 3% to $20.5 billion.
The reduction in ASML orders and the decline in Taiwan's equipment spending indicate a more cautious approach to capital expenditure by semiconductor manufacturers amid high inflation, geopolitical, and tariff uncertainties.
