Taiwan Semiconductor Manufacturing Company Limited Q1 FY2025 Earnings Call

· Earnings call transcript and AI-powered summary

Q1 2025 Financial Performance

  • Q1 revenue was USD 25.5B, down 5.1% quarter-over-quarter, primarily due to smartphone seasonality; partially offset by strong AI-related demand.
  • Gross margin decreased slightly to 58.8% (down 0.2 percentage points from Q4), impacted by Taiwan’s January 21 earthquake and initial overseas fab dilution.
  • Operating margin declined to 48.5%, down 0.5 percentage points sequentially.
  • EPS was TWD 13.94 and ROE 32.7%.
  • Cash and marketable securities totaled TWD 2.7T (~USD 81B). Cash balance rose by TWD 267B.
  • CapEx for Q1 was USD 10.06B, with full-year 2025 CapEx unchanged at USD 38B–42B.

Revenue Breakdown (Q1 2025)

  • Technology mix:
    • 3nm: 22% of wafer revenue
    • 5nm: 36%
    • 7nm: 15%
    • Advanced nodes (7nm and below): 73%
  • Platform mix:
    • HPC: up 7% QoQ, now 59% of revenue
    • Smartphone: down 22%, at 28%
    • IoT: down 9%, at 5%
    • Automotive: up 14%, at 5%
    • DCE: up 8%, at 1%

Q2 2025 Guidance

  • Revenue expected at USD 28.4B–29.2B, representing +13% QoQ or +38% YoY at midpoint.
  • Gross margin 57%–59%; operating margin 47%–49%.
  • Temporary tax rate increase to ~20% in Q2 due to required accrual; will normalize to 14–15% in Q3/Q4.

Key Management Messages

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Jeff Su: Good afternoon, everyone, and welcome to TSMC's First Quarter 2025 Earnings Conference Call. This is Jeff Su, TSMC's Director of Investor Relations and your host for today. TSMC is holding our earnings conference call via live audio webcast through the Company's website at www.tsmc.com, where you can also download the earnings release materials. If you are joining us through the conference call, your dial-in lines are in listen-only mode. The format for today's event will be as follows: First, TSMC's Senior Vice President and CFO, Mr. Wendell Huang, will summarize our operations in the fist quarter 2025, followed by our guidance for the second quarter 2025. Afterwards, Mr. Huang and TSMC's Chairman and CEO, Dr. C.C. Wei, will jointly provide the Company's key messages. Then we will open the line for questions and answers. As usual, I would like to remind everybody that today's discussions may contain forward-looking statements that are subject to significant risks and uncertainties, which could cause actual results to differ materially from those contained in the forward-looking statements. Please refer to the safe harbor notice that appears in our press release. And now, I would like to turn the call over to TSMC's CFO, Mr. Wendell Huang for the summary of operations and the current quarter guidance. Wendell Huang: Thank you, Jeff. Good afternoon, everyone. Thank you for joining us today. My presentation will start with financial highlights for the first quarter 202

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