TSMC(US:TSM) HTSC·2025-04-18 05:16Investment Rating - The report maintains a "Buy" rating for the company with a target price of $227.98 [5][8][9] Core Insights - The company reported Q1 2025 revenue of $25.53 billion, a quarter-over-quarter decrease of 5.1%, with a gross margin of 58.8% [1][14] - The company expects Q2 2025 revenue to be between $28.4 billion and $29.2 billion, representing a quarter-over-quarter increase of approximately 13%, which is above market expectations [1][14] - The company maintains its full-year revenue guidance for 2025, projecting a year-over-year growth of approximately 25% [2][14] - The company is accelerating its expansion in the U.S., with a total investment of $165 billion, expecting 30% of its 2nm capacity to be located in Arizona [3][14] - AI demand is anticipated to double in 2025, with continued strong demand for 3nm and 5nm technologies [4][33] Summary by Sections Q1 2025 Performance - The company reported a net profit of $11 billion, exceeding Bloomberg consensus by 3% [1] - Revenue breakdown by application: smartphones 28%, HPC 59%, IoT 5%, automotive 5%, and DCE 1% [1][13] - Capital expenditure for Q1 2025 was $10.06 billion [13] Q2 2025 and Full-Year 2025 Outlook - The company expects Q2 2025 revenue to be between $28.4 billion and $29.2 billion, with a gross margin forecast of 57.0%-59.0% [14] - The full-year revenue guidance for 2025 remains unchanged, projecting a 25% year-over-year increase [2][14] U.S. Expansion and Capacity - The company is investing an additional $100 billion in Arizona, with plans for multiple fabs using advanced technologies [3] - After expansion, approximately 30% of the company's 2nm and more advanced capacity will be in Arizona [3] AI Demand and Technology Leadership - The company expects AI-related revenue to double in 2025, with strong demand for its advanced process technologies [4][33] - The N2 process is expected to begin production in the second half of 2025, further solidifying the company's technological leadership [4]