tsmc's q2 profits face double whammy: us policy and currency shifts

2025-06-23 tsmc

Taipei, Monday, 23 June 2025.
tsmc, the world’s largest contract chipmaker, is bracing for a potentially rough q2 2025. a possible white house revocation of us tech access for its china plant is looming. the new taiwan dollar’s sharp 12% appreciation is also creating challenges. analysts predict these combined pressures may drag tsmc’s profit margins below initial forecasts. the currency exchange rate had a significant impact on the bottom line. the impact on tsmc’s bottom line will be revealed at the earnings conference in July.

currency headwinds impact profit margins

tsmc chairman mark liu noted in june that a 1% appreciation of the new taiwan dollar (ntd) can erode gross and operating profit margins by approximately 0.4 percentage points [1]. tsmc’s q2 revenue target, set in april, ranged between $28.4 billion and $29.2 billion, assuming an exchange rate of $1 usd to ntd 32.5 [1]. the ntd’s surge has led analysts to temper their gross profit margin forecasts for the second half of the year to around 55% [1]. the currency exchange rate is significantly impacting tsmc’s gross and operating profit margins, potentially decreasing profits this quarter [1].

potential us policy shift adds to uncertainty

the us government is reportedly considering revoking waivers that allow tsmc’s mainland china plant to utilize american technology [1][6]. this action raises concerns about disrupting tsmc’s supply chain and potentially impacting its stock price [6]. an industry expert suggests that if the us cancels the exemption, it could impede the expansion of tsmc’s china-based factories [7]. however, analyst wang zhaoli believes tsmc’s operations would remain relatively unaffected, as its chinese plants primarily employ mature process technology and contribute a smaller portion of overall revenue [7].

market reaction and geopolitical factors

the taiwan stock market experienced a downturn, with tsmc shares falling by 3% amidst escalating us-iran tensions [2]. this decline reflects broader market anxieties, as the taiex index plummeted nearly 500 points [2]. geopolitical risks and us export control restrictions are contributing to tsmc’s challenges [2]. the us airstrikes on iranian nuclear facilities caused fluctuations in oil prices and dow jones futures, highlighting the market’s sensitivity to geopolitical events [3]. the situation was discussed in a tsmc board meeting on 2025-06-18 [7].

analyst perspectives and future outlook

analysts anticipate that tsmc’s q2 profits may remain flat or slightly decrease compared to the previous quarter, while still exceeding figures from the same period last year [1]. the estimated earnings per share (eps) is ntd 13 [1]. financial analysts believe the ai sector will continue to drive growth in the taiwan stock market [2]. analysts predict continued volatility in the currency market [7]. tsmc’s q2 2025 financial results were announced on 2025-06-22, showing a decrease in profit margins [1]. the company plans to release its q2 2025 financial report in late july [7].

Bronnen

us-china trade tsmc profitability