TSMC Q1 Revenue Soars 41.6% YoY Despite Seasonal Smartphone Dip

Taipei, Taiwan - Taiwan Semiconductor Manufacturing Co Ltd (TSMC) reported first-quarter net revenue of NT$839.25 billion ($25.53 billion), representing a 41.6% year-on-year increase despite a 3.4% sequential decline from the previous quarter.

The world's largest contract chipmaker posted a gross margin of 58.8% and an operating margin of 48.5% for the quarter ended March 31. 

Net income attributable to shareholders rose 60.3% year over year to NT$361.56 billion.

According to the company's quarterly management report, the sequential revenue decline was primarily attributed to "smartphone seasonality," though this was "partially offset by continued growth in AI-related demand."

The chipmaker's advanced technologies (7nm and below) accounted for 73% of total wafer revenue, with 3nm process technology contributing 22%, and 5nm and 7nm accounted for 36% and 15%, respectively.

High-performance computing (HPC) emerged as TSMC's dominant revenue segment at 59%, showing 7% sequential growth. 

The smartphone segment declined 22% quarter-over-quarter to represent 28% of net revenue. 

Revenue from Automotive applications grew 14% from the previous quarter.

TSMC acknowledged that the January 21 earthquake negatively impacted its gross margin, which decreased 0.2 percentage points from the previous quarter but increased 5.7 percentage points year over year. 

The company estimated related earthquake losses to be approximately NT$5.3 billion, net of insurance claims.

North American customers continued to dominate TSMC's revenue sources, accounting for 77% of total net revenue in the first quarter, up from 75% in the previous quarter and 69% in the first quarter of 2024.

The company reported capital expenditures of US$10.06 billion for the quarter, down from US$11.23 billion in the fourth quarter of 2024. 

TSMC generated NT$625.57 billion in operating cash flow and reported free cash flow of NT$294.74 billion.

At the end of the quarter, cash and marketable securities totaled NT$2,703.09 billion, representing 37.9% of the company's total assets of NT$7,133.29 billion.

According to a March 4 statement cited in the report, the company noted in its recent announcements that it intends to expand its investment in the United States to US$165 billion "to power the future of AI. "

TSMC also approved a cash dividend of NT$4.50 for the fourth quarter of 2024, setting June 12, 2025, as the ex-dividend date. The distribution is scheduled for July 10, 2025.