By Ion Jauregui – Analyst at ActivTrades
Taiwan Semiconductor Manufacturing Company (TSMC) has become the heart of today’s technological revolution. In a world where artificial intelligence (AI) sets the pace for economic and geopolitical development, this Taiwanese company plays a key role as the dominant manufacturer of advanced chips. In an environment marked by trade tensions, currency fluctuations, and regulatory pressure, TSMC demonstrates exceptional strength, positioning it as one of the most strategic companies on the planet.
During the first quarter of 2025, TSMC reported revenues of $18.865 billion, representing a 16.5% year-on-year increase, and a net profit of $7.22 billion. Its gross margin reached 53.1%, while earnings per share stood at $2.12, beating market expectations. This performance reflects not only flawless execution but also strong demand in key sectors such as high-performance computing (HPC), mobile devices, and above all, applications linked to artificial intelligence. The boom in generative AI has driven up the need for advanced chips with massive processing capabilities. Companies like Nvidia, AMD, and Apple rely on TSMC for the production of the most sophisticated semiconductors, manufactured using 3nm processes and, soon, 2nm. According to the company’s own statements, revenue from AI accelerators is expected to double in 2025 compared to the previous year, confirming its central role in this new digital era.
TSMC leads not only in technology but also in scale and efficiency. With over 50% of the global chip foundry market, the company has maintained EBITDA margins above 65%, a cash position exceeding $60 billion, and a highly competitive cost structure. Its “pure foundry” business model, which avoids competing with its clients in chip design, has made it an irreplaceable strategic partner. Its expansion plans include new facilities in the U.S. and Japan, with a global investment of over $100 billion aimed at strengthening its production capacity outside Taiwan. This strategy responds both to the national security demands of developed countries and to the growing fragmentation of the global supply chain.
On the currency front, amid escalating trade tensions and a highly volatile exchange rate environment, the Taiwanese dollar (TWD) has posted its largest advance since 1988, appreciating more than 10% against the U.S. dollar (USD) over the past month. This rally has coincided with growing speculation over a potential trade agreement between Taiwan and the U.S., as well as a pullback in the dollar driven by macroeconomic uncertainty and more aggressive tariff policies from Donald Trump. This poses a risk to the company’s operating margins. TSMC has acknowledged that each 1% strengthening of the TWD can negatively impact its margins by 0.4%. However, the strong growth in demand and its ability to pass on part of the costs to customers help mitigate this effect.
Technical Analysis (TSM.US)
Looking at the company’s stock price, since Monday, April 7, it has been recovering toward the mid-point of the bell curve at $172.23, the closing price from the previous session. Its January highs act as resistance, creating a range between the highs at $222.66 and the support at $132.32. The RSI is slightly imbalanced at 58.84%. Currently, the moving average crossover has expanded upward, with the 50-day average crossing above the 100-day average, although the 200-day average remains above both. It is possible that we may soon see a bullish move aiming to surpass $196 as a first step toward new highs.
With a still reasonable valuation compared to other tech giants, TSMC represents a strategic investment opportunity at the epicenter of the digital transformation. Its technological leadership, financial strength, and geopolitical role make it a fundamental piece of the new global technological order.
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.
Taiwan Semiconductor Manufacturing Company (TSMC) has become the heart of today’s technological revolution. In a world where artificial intelligence (AI) sets the pace for economic and geopolitical development, this Taiwanese company plays a key role as the dominant manufacturer of advanced chips. In an environment marked by trade tensions, currency fluctuations, and regulatory pressure, TSMC demonstrates exceptional strength, positioning it as one of the most strategic companies on the planet.
During the first quarter of 2025, TSMC reported revenues of $18.865 billion, representing a 16.5% year-on-year increase, and a net profit of $7.22 billion. Its gross margin reached 53.1%, while earnings per share stood at $2.12, beating market expectations. This performance reflects not only flawless execution but also strong demand in key sectors such as high-performance computing (HPC), mobile devices, and above all, applications linked to artificial intelligence. The boom in generative AI has driven up the need for advanced chips with massive processing capabilities. Companies like Nvidia, AMD, and Apple rely on TSMC for the production of the most sophisticated semiconductors, manufactured using 3nm processes and, soon, 2nm. According to the company’s own statements, revenue from AI accelerators is expected to double in 2025 compared to the previous year, confirming its central role in this new digital era.
TSMC leads not only in technology but also in scale and efficiency. With over 50% of the global chip foundry market, the company has maintained EBITDA margins above 65%, a cash position exceeding $60 billion, and a highly competitive cost structure. Its “pure foundry” business model, which avoids competing with its clients in chip design, has made it an irreplaceable strategic partner. Its expansion plans include new facilities in the U.S. and Japan, with a global investment of over $100 billion aimed at strengthening its production capacity outside Taiwan. This strategy responds both to the national security demands of developed countries and to the growing fragmentation of the global supply chain.
On the currency front, amid escalating trade tensions and a highly volatile exchange rate environment, the Taiwanese dollar (TWD) has posted its largest advance since 1988, appreciating more than 10% against the U.S. dollar (USD) over the past month. This rally has coincided with growing speculation over a potential trade agreement between Taiwan and the U.S., as well as a pullback in the dollar driven by macroeconomic uncertainty and more aggressive tariff policies from Donald Trump. This poses a risk to the company’s operating margins. TSMC has acknowledged that each 1% strengthening of the TWD can negatively impact its margins by 0.4%. However, the strong growth in demand and its ability to pass on part of the costs to customers help mitigate this effect.
Technical Analysis (TSM.US)
Looking at the company’s stock price, since Monday, April 7, it has been recovering toward the mid-point of the bell curve at $172.23, the closing price from the previous session. Its January highs act as resistance, creating a range between the highs at $222.66 and the support at $132.32. The RSI is slightly imbalanced at 58.84%. Currently, the moving average crossover has expanded upward, with the 50-day average crossing above the 100-day average, although the 200-day average remains above both. It is possible that we may soon see a bullish move aiming to surpass $196 as a first step toward new highs.
With a still reasonable valuation compared to other tech giants, TSMC represents a strategic investment opportunity at the epicenter of the digital transformation. Its technological leadership, financial strength, and geopolitical role make it a fundamental piece of the new global technological order.
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.