Chip Giants Face Headwinds

Chip Giants Face Headwinds

15 April 2025

TSMC and ASML, key players in the semiconductor industry, are expected to reveal the impact of tariffs and a potential slowdown in AI-related demand in their upcoming earnings reports. These factors have shaken investor confidence, leading to multi-year valuation lows. TSMC's March revenue saw a surge, with a 46.5% increase from March 2024, reaching approximately US$8.66 billion. First quarter revenue also jumped 41.6% compared to the same period last year. However, concerns persist regarding potential US tariffs reducing end-product demand, which could negatively affect the semiconductor market. TSMC may also face a US$1 billion penalty related to alleged Huawei chip violations.

ASML's performance is also under scrutiny, with analysts citing slowing demand in China as a factor impacting its financials. While TSMC has a strong position in advanced chipmaking, particularly with the increasing demand for AI chips, rising operating costs linked to overseas expansion and underutilisation of mature-node facilities could pose short-term profitability risks. The outlooks from these companies will provide valuable insights into the overall health and future prospects of the semiconductor industry.

Published on 15 April 2025

This content may differ from the original.