TSMC Tempers Quake Loss but AI Concerns Cast a Shadow Over Revenue Outlook
Taiwan Semiconductor Manufacturing Co. (TSMC) tempered the effect of the earthquake on its operational loss while addressing ongoing TSMC AI concerns. As per Yahoo Finance, TSMC said the first quarter sales will be at the lower end of the forecast range due to the impact of the earthquake on production in January,
Losses due to the quake were about $161 million net of insurance claims. TSMC said in a statement on Monday, “making every effort to recover the lost production.”
TSMC Tempers Quake Loss
After a big earthquake hit Taiwan, TSMC tempered the quake loss telling investors that it didn’t slow down production much. The company said that while some chip-making plants stopped working for a bit, they got back to business fast without losing much money.
The company maintained that the first quarter gross profit margin will be between 57% to 59% and the profits for the full year will also be the same. Before the earthquake, the forecasts provided by the company predicted that the profit would be $25 billion to $25.8 billion. In January 2025 TSMC posted strong revenue expectations for the year.
January sales jumped 36% to NT$293.3 billion, after a 38.8% boost in the last quarter of 2024. Due to the high demand for AI chips, TSMC’s quarterly earnings exceeded expectations for October to December 2024. Market experts predict, on average, a 41% revenue surge in TSMC’s first-quarter sales.
The first-quarter sales of TSMC were in sync with the market expectations despite the rising concern. The company reported steady growth due to strong demand for advanced chips intended for AI applications and automotive sectors as well as data center deployments.
TSMC Market Outlook
TSMC’s market remains dynamic as the company navigates external challenges. While TSMC tempers quake loss, concerns about AI spending and global semiconductor demand continue to shape its strategic decisions. Though tech giants have defended their AI investments in the middle of growing competition from DeepSeek
Prior to DeepSeek’s market entry in January 2023, TSMC expected its capital expenditure for 2025 to hit a new $42 billion record due to the growing AI market demand. The positive outlook of TSMC received further backing from its essential equipment provider ASML.
TSMC is tempering quake loss with swift recovery but still careful over future demand impacts by AI concerns. The company’s first-quarter sales were at expected levels and the TSMC revenue guidance still reflects guarded optimism.
