Back to blog

TSMC Surpasses Expectations but Faces Geopolitical Challenges: What About the Stock Price?

Taiwan Semiconductor Manufacturing Company (TSMC), the Taiwanese chipmaker, entered 2025 with significant fundamental strength. This assertion is primarily supported by their first-quarter results, which exceeded expectations, although following that, the stock price slightly declined. The reason? The well-known geopolitical risks related to the US trade policy. However, we believe it’s crucial to consider the broader context, which we will, of course, analyse.

TSMC Surpasses Expectations but Faces Geopolitical Challenges: What About the Stock Price?

Record-Breaking Financial Results

In numerical terms, TSMC reported revenue of 839.25 billion TWD, which represents a 41.6% year-on-year growth. This figure means a relatively smooth surpassing of analysts' consensus, who had expected revenue to be 835.13 billion TWD. Of course, this marks a significant shift, but even more impressive was the net profit. It reached 361.56 billion TWD, a year-on-year increase of 60.3%, once again exceeding analysts' expectations of 354.14 billion TWD.

These records were largely driven by revenues from the wafer division, with major contributors being manufacturing technologies at the 7nm level and below. Simply put, all of this points to the sustained demand for the most advanced chips used in artificial intelligence (AI), data centres, smartphones, and other high-tech devices.

Stock Price Development

The story of the stock price development, however, reflects a somewhat more mixed picture. Shortly after the release of quarterly data on April 17, 2025, we observed a slight decline of approximately 1%. By April 22, 2025, the loss had deepened to 816 TWD, with the stock price gradually dropping by 23% since the beginning of 2025.* However, this is part of a broader trend of price corrections on the capital markets, so these discounts can be seen more as an opportunity to buy fundamentally strong companies.[1]

 

Obrázok1

Source: Google Finance*

Trump's Tariffs and Export Restrictions

As mentioned earlier, the major challenge TSMC currently faces is the trade policy of Donald Trump. The base tariff rate of 10% could directly affect the export of chips to the USA, but this is still the better scenario. If a mutual agreement between the USA and Taiwan is not reached within the set 90-day period, the rate could rise to 32%, which is logically even riskier from a financial perspective for TSMC.[2]

In addition to tariffs, there is also talk of expanding the so-called AI diffusion rules, aimed at restricting the export of advanced chips to companies like Nvidia and AMD, which are TSMC's largest customers. These rules thus create additional pressure on the companies and its partners to respond quickly and, above all, efficiently.

TSMC and Investments in the USA

According to current information, the primary response to the mentioned risks in production is strengthening its presence in the USA. The company announced a new investment commitment of 100 billion USD, bringing the total value of its US projects to 165 billion USD. Specifically, this involves building three factories in Arizona to ensure stable chip production for the US market outside of Taiwanese territory.

These initiatives are also part of a broader ecosystem of investments in artificial intelligence, in which up to 500 billion USD is planned to be invested in AI infrastructure, with TSMC being one of the main manufacturing partners.

Long-Term Potential, Short-Term Fluctuations

From an investor's perspective, TSMC represents a fundamentally strong company with a dominant position in the global supply chain for advanced chips. The financial results demonstrate technological excellence and financial strength, while the stock price remains at very attractive levels for new investors or those looking to strengthen their existing positions.[3]

 

* Past data is not a guarantee of future returns.

[1,2,3] Forward-looking statements are assumptions and current expectations that may not be accurate or are based on the current economic environment, which may change. These statements do not guarantee future performance. Forward-looking statements, by their nature, involve risk and uncertainty because they relate to future events and circumstances that cannot be predicted and actual developments and results may differ materially from those expressed or implied by any forward-looking statements.   

Disclaimer! This marketing material is not and should not be construed as investment advice. Past performance data is not a guarantee of future returns. Investing in foreign currency may affect returns due to fluctuations. All securities transactions may result in both gains and losses. Forward-looking statements represent assumptions and current expectations that may not be accurate or are based on the current economic environment, which may change. These statements are not guarantees of future performance. InvestingFox is a trademark of CAPITAL MARKETS, o.c.p., a.s. regulated by the National Bank of Slovakia.

Sources:

https://www.cnbc.com/2025/04/17/tsmc-first-quarter-profit-tops-estimates-rising-60percent-as-trump-trade-policy-threatens-growth-.html

https://investor.tsmc.com/english/encrypt/files/encrypt_file/reports/2025-04/ae894c20458e4885df6919511660de815cc6cf71/FS.pdf

https://investor.tsmc.com/english/encrypt/files/encrypt_file/reports/2025-04/8e7d27fd8fb010c689d221dc3b8450095bbfc7e2/1Q25ManagementReport.pdf

 

Read more

SK Hynix Hits New High as It Builds South Korea’s Largest Data Center

SK Hynix Hits New High as It Builds South Korea’s Largest Data Center

For SK Hynix, a manufacturer of state-of-the-art semiconductors from Korea, 2025 has so far been as successful as the previous one. This proves that last year's 30% rise in share price was not accidental and the company is doing everything it can to maintain the momentum.* The latest is the plan to build the largest data center in cooperation with Amazon, which has the potential to strengthen the 50% increase in the value of shares since April, even further.

Apple and the Foldable iPhone: Could It Set New Sales Records?

Apple and the Foldable iPhone: Could It Set New Sales Records?

The first news about the possibility of starting production of a foldable iPhone bypassed technology enthusiasts at the end of last year, but unfortunately at that time it was only preliminary information, without a broader basis. We are currently in the middle of 2025 and analyst Ming-Chi Kuo of TF International Securities, a renowned expert on the Asian supply chain, commented on the situation. According to him, production of the foldable iPhone is likely to begin as early as 2026. Investors should not miss it, as this novelty would potentially have a chance to push stagnant sales.

Meta and Scale AI: What Will Zuckerberg Gain From the $14 Billion Bet?

Meta and Scale AI: What Will Zuckerberg Gain From the $14 Billion Bet?

At the beginning of last week, the first speculations appeared on the market about one of Meta's largest investments, namely the acquisition of a minority stake in the startup Scale AI founded by Alexander Wang. Preliminary information was subsequently confirmed on Friday, which also led investors to think about the possible impacts. Will Meta be able to reach the very top of AI innovation thanks to the new collaboration, or are the expectations too high? Will we see a new absolute high for Meta's share price soon?

Looking to Diversify Beyond U.S. Equities? M2C Is Going Public!

Looking to Diversify Beyond U.S. Equities? M2C Is Going Public!

When in 1992 a group of students decided to establish a company with the aim of providing services, probably none of them knew that three decades later, the company would stand on the threshold of the Prague Stock Exchange and head to America. Mark2 Corporation, M2C, has moved from a simple Facility Management (FM) to a high-tech ecosystem of services, which today operates in 13 countries in Europe, is expanding to the Middle East and the United States, and is preparing for an initial public offering (IPO) that you will soon be able to use.