TSMC seems to be seeing the Iran war as background noise for the AI boom.
The contract chip maker, which counts clients like Nvidia and the Fruity Cargo Cult Apple, nudged up its outlook for 2025 revenue growth and played down supply-chain drama. Shares were down 2.64 per cent.
TSMC said its 2025 capital spending should land at the top end of the $52 billion to $56 billion range it laid out in January. It expects revenue to grow more than 30 per cent this year in dollar terms, edging past its earlier “around 30 per cent” call.
TSMC chief executive C C Wei said the company went back to customers to double-check whether demand for AI was wobbling.
He said they told the chip maker it was still strong, so it is pushing faster investment, including adding clean-room capacity.
The company posted a 66 per cent gross margin for the first quarter, the best in more than 20 years, according to S&P Global Market Intelligence. That happened even with softer bits, including an 11 per cent slide in its smartphone business compared with the previous quarter.
eToro analyst Josh Gilbert said in a note: “For anyone wondering whether the AI trade still has legs, TSMC just told us that business has never been better.”
TSMC’s fat margins and eager spending have turned it into the semiconductor industry’s nerve centre, with suppliers clustering around its growing bases in Taiwan, the US and elsewhere. They are lining up to match its road map and skim whatever profit Chipzilla and the rest leave on the table.
Taiwan’s benchmark index has hit record highs in recent sessions, including a 1.1 per cent rise on Thursday. TSMC shares closed at a fresh high the same day, putting its market value at $1.7 trillion after an initial drop when the Iran war flared in late February.
Taiwan is not short of AI-adjacent names, including Foxconn building Nvidia servers and firms specialising in chip stacking and integration.
The Middle East conflict has not killed the optimism, but it brings awkward exposure. Taiwan leans heavily on imported fuel for electricity, and chipmaking guzzles power.
Last week, TSMC vice president Cliff Hou urged Taiwan to boost strategic reserves and diversify supplies of helium, hydrogen and natural gas. TSMC executives said on Thursday that Taiwan has enough liquefied natural gas through at least May, so they do not expect near-term production hits.
They said speciality gases such as helium and hydrogen come from multiple suppliers and regions, so any snag is unlikely to have a material impact on output.
Wei said TSMC has bought more land in Arizona, its US production hub, to expand capacity and feed long-term demand from leading US customers.
