Stock up before the tariffs come into effect! TSMC's revenue continued to accelerate in April, with a significant increase of 48.1% year-on-year

Source: Wall Street News

Electronic enterprises are rushing to purchase key components before global tariffs take effect. TSMC's revenue in April increased significantly by 48%, but the surge of the New Taiwan dollar may put pressure on TSMC's profit margin.

On Friday, May 9, TSMC released its revenue report for April 2025. The report showed that TSMC's sales in April were NT$349.57 billion. It increased by 22.2% month-on-month and 48.1% year-on-year, far exceeding analysts' expectations of 38%. The growth rate was faster compared to the year-on-year growth rate of 46.5% in the previous month.

The report also showed that TSMC's cumulative sales in the first four months were NT$118.8821 billion, a year-on-year increase of 43.5%. Previously, TSMC announced that its net profit in the first quarter increased by 60% year-on-year, surpassing expectations.

However, the recent surge of the New Taiwan dollar may put pressure on TSMC's future profit margin, as most of TSMC's business is conducted in US dollars. TSMC has stated that for every 1% appreciation of the New Taiwan dollar, its operating profit margin will decrease by 0.4 percentage points.

On the other hand, under the shadow of the tariff war, the prospects of many industries have been negatively affected. According to CCTV News, the US government's tariff policy has brought a lot of uncertainties to the US and world economies. From toothpaste manufacturers to chip giants, some large US enterprises have recently expressed pessimism about the future prospects.

Nevertheless, as a key enterprise in the supply chain, TSMC can be regarded as a barometer of global technology spending. It has emphasized that its demand remains strong, especially for high-end NVIDIA chips. In addition, some media have reported that the Trump administration plans to revoke and modify a regulation implemented during the Biden administration that aims to restrict the export of advanced artificial intelligence chips. This is also beneficial to TSMC in the short term, as 20% of TSMC's sales come from artificial intelligence chips.

Last week, Morgan Stanley listed TSMC as a top stock. The capital expenditures of Meta and Microsoft indicate that the demand for AI products remains strong, confirming the bright prospects of the company. Morgan Stanley has given a "buy" rating to TSMC's stock.

After the report was released, TSMC's US-listed shares rose during the night session, currently up nearly 3%.

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