Core Insights - Taiwan Semiconductor Manufacturing Company (TSMC) reported a nearly 61% year-on-year increase in second-quarter profit, driven by strong demand for artificial intelligence chips [1] - TSMC's net revenue for the June quarter rose 38.65% year-on-year to NT$933.80 billion ($31.7 billion), surpassing estimates [2][5] - The company is benefiting from the growing trend towards AI, producing advanced processors for major clients like Nvidia and Apple [2] Financial Performance - Second-quarter net profit reached a record high of NT$398.27 billion, exceeding expectations of NT$377.86 billion [5] - TSMC's revenue of NT$933.80 billion also beat the forecast of NT$931.24 billion [5] Market Dynamics - TSMC faces potential challenges from U.S. trade policies, including the threat of steep tariffs on Taiwan announced by President Trump [2][3] - U.S. export controls have limited TSMC's business with China, affecting key clients such as Nvidia and AMD, although recent assurances from the U.S. government may allow these companies to continue shipping products to China [4]

Well, European chipmaker ASML throwing cold water on yesterday's chip stock rally. The company walking back its 2026 growth forecast, citing trade risks and global tensions. Joining me now, Patrick Morehead, more insight strategy founder, CEO, and chief analyst.Patrick, it's good to see you. So, um, you know, ASML, maker of these lithography machines that are basically crucial in the chipm. They're seen usually as sort of a bell weather or an indicator.So what does it tell us that they are seeing this tarif ...

Investment Rating - The report assigns a "Buy" rating to several companies including NVIDIA, AMD, and TSMC, indicating a positive outlook for these firms in the technology sector [33]. Core Insights - The resumption of NVIDIA's H20 GPU sales to China is expected to positively impact the APAC technology supply chain, particularly benefiting companies like Inventec and Wistron [2][4]. - AMD's MI308X license applications for export to China are moving forward, which could lead to a recovery in revenue after significant write-downs [3]. - The overall demand for NVIDIA's RTX GPU series may moderate due to the increased availability of H20 GPUs, suggesting a shift in market dynamics [4][6]. Summary by Sections NVIDIA and AMD Developments - NVIDIA is filing applications to resume sales of the H20 GPU, with government assurances for license approval, and has introduced a compliant RTX PRO GPU [2]. - AMD's license applications for MI308X are under review, with expectations of resuming shipments as approvals are granted, despite prior inventory write-downs of approximately US$800 million [3]. APAC Technology Supply Chain - Inventec is positioned to benefit significantly from the H20 server rack business, with 10% of shipments to China potentially generating over 20% of sales due to higher average selling prices (ASPs) [4]. - Other ODMs like Wistron and Hon Hai are also expected to gain from the H20 export relief, enhancing their revenue prospects [4]. Semiconductor and HBM Market - The relaxation of export controls on NVIDIA's AI GPUs is anticipated to benefit upstream suppliers like TSMC and KYEC, with projections of significant growth in CoWoS demand [8]. - Samsung is expected to be the main beneficiary in the HBM market due to the resumption of H20 sales, with forecasts indicating substantial quarter-over-quarter growth in HBM bit demand [10]. Price Dynamics and Market Trends - The report notes a potential moderation in RTX GPU sales due to cannibalization from H20, with expectations of price adjustments in the secondary market [6]. - The demand for HBM is projected to surge with the resumption of H20 shipments, despite ongoing localization efforts in China [9].

Core Insights - Taiwan Semiconductor Manufacturing Company Ltd. (TSM) is set to report its second-quarter 2025 earnings on July 17, with a strong focus on advanced semiconductor technologies and increasing demand for AI chips across various sectors, indicating potential robust financial results [1] Revenue Projections - TSM projects revenues between $28.4 billion and $29.2 billion for the second quarter, reflecting a year-over-year increase of 38.3% at the midpoint, while the Zacks Consensus Estimate stands at $30.04 billion, suggesting a year-over-year growth of 44.3% [2][10] Demand for Advanced Chips - The rising adoption of AI in cloud services, personal electronics, and data centers has significantly increased the demand for high-performance chips, benefiting TSM as the world's largest contract chipmaker, particularly due to its leadership in advanced chipmaking technologies like the 3-nm and 5-nm nodes [3][10] AI-Focused Product Demand - TSM has experienced strong demand for its AI-focused products, including Chip-on-Wafer-on-Substrate advanced packaging solutions, with demand consistently exceeding supply, highlighting the company's essential role in AI and high-performance computing applications [4] Margin Pressures - Rising operational costs from TSM's global expansion into Arizona, Japan, and Germany are expected to negatively impact gross margins by 2-3% annually over the next three to five years due to higher labor and utility costs and lower initial utilization rates [5] - Additionally, higher energy prices in Taiwan, following a 25% electricity hike in 2024, present further challenges, especially as advanced nodes require more power [6] Earnings Outlook - Despite the challenges, analysts remain optimistic about TSM's bottom-line growth, with the Zacks Consensus Estimate for second-quarter earnings revised upward by 5 cents to $2.37 per share, indicating a year-over-year growth of 60.1% [7]

Core Viewpoint - Taiwan Semiconductor Manufacturing Company (TSMC) is positioned as a leading player in the artificial intelligence (AI) sector, providing significant returns to investors and achieving new all-time highs in stock performance [1][2]. Company Positioning - TSMC operates as a chip foundry, producing chips for various companies involved in the AI race, including major clients like Nvidia, Tesla, Broadcom, and Apple [4]. - The company is not in competition with its customers, as it does not sell its own products, which alleviates concerns regarding intellectual property conflicts [5]. Technological Advancements - TSMC is recognized for being a pioneer in launching cutting-edge technologies, with its 3-nanometer (nm) chip node achieving high production yields [6]. - The company plans to introduce a 2nm node later this year and a 1.6nm node next year, ensuring continuous innovation and client retention [6]. Growth Metrics - TSMC has experienced rapid growth, with a year-to-date revenue increase of 40% year over year, indicating strong expansion despite a competitive market [11]. - The company reported a 26.9% revenue increase in June, following strong results in the preceding months [10]. Market Comparison - TSMC is the ninth-largest company globally and is growing at a rate comparable to Nvidia, which is notable for a company of its size [13]. - Management anticipates a five-year compound annual growth rate (CAGR) approaching 20%, suggesting sustained growth in the future [13]. Investment Sentiment - TSMC is viewed as a top stock for long-term investment, capitalizing on the AI race and maintaining strong sales to both Nvidia and potential competitors [14].

Group 1 - The service Beyond the Wall Investing offers significant savings on equity research reports, potentially saving thousands of dollars annually for subscribers [1] - The investing group provides a fundamentals-based portfolio, weekly insights from institutional investors, and alerts for short-term trade ideas based on technical signals [2] - Community engagement is facilitated through ticker feedback requests and chat features, enhancing the overall investment experience [2] Group 2 - The article emphasizes that past performance does not guarantee future results, highlighting the importance of independent analysis [3] - It clarifies that Seeking Alpha does not provide personalized investment advice and that opinions expressed may not represent the platform as a whole [3]

Core Insights - Vanessa Lee, Vice President of Materials Management at TSMC, has resigned for personal reasons after taking an extended leave, effective July 13, 2025 [1][2] - Cliff Hou, Senior Vice President and Co-Chief Operating Officer, will take over her responsibilities [1] Group 1: Background on Vanessa Lee - Lee joined TSMC in 2022 as Senior Director of Materials Management and was promoted to Vice President in 2024, becoming the youngest person to hold that title in the company's history [3] - Her previous experience includes significant roles at Apple and Alphabet Inc., where she was known for her expertise in global procurement [5][6] Group 2: Impact and Speculation - Lee's departure has led to speculation regarding the reasons behind it, with some attributing it to personal career planning and others suggesting potential internal management issues, though these claims remain unconfirmed [2] - During her tenure, Lee was involved in high-profile events and was recognized for her influence within TSMC, including attending a private dinner with NVIDIA CEO Jensen Huang [4] Group 3: Contributions to TSMC - Lee established a working model to provide demand forecasts to suppliers and improved collaboration efficiency, which was crucial during supply chain disruptions caused by the COVID-19 pandemic [6]

Investment Rating - The report assigns an "Overweight" rating to TSMC with a price target of NT$1,275.0 by December 2025 [4][6]. Core Insights - TSMC's 2Q25 sales were NT$934 billion, reflecting an 11% quarter-over-quarter increase and a 39% year-over-year increase, driven by strong demand for N3 and accelerated AI shipments [3][4]. - The company is expected to raise its FY25 revenue guidance to high 20% growth in USD terms, supported by robust AI demand and minimal order reductions from major clients like Apple [3][6]. - For FY26, TSMC is projected to achieve 14% year-over-year revenue growth, driven by price hikes and strong demand for N2 and N3 processes [3][6]. Summary by Sections Financial Performance - TSMC's June revenue was NT$264 billion, down 18% month-over-month but up 27% year-over-year [3]. - The 2Q GM is expected to fall within the company's guidance range of 57-59%, despite the TWD appreciating by 11% [3]. Future Outlook - For 3Q25, TSMC is expected to guide for 3-6% quarter-over-quarter revenue growth, primarily due to ongoing strong demand for N3 and N4/N5 [3]. - The company anticipates a decline in GM due to the impact of TWD appreciation [3]. Key Topics for Earnings Meeting - Key discussion points for the upcoming earnings meeting include demand visibility for AI, growth expectations for 4Q25, and the potential impact of TWD appreciation on GM [3][4]. Valuation - The price target of NT$1,275 is based on approximately 20x 12-month forward P/E, reflecting positive demand drivers and a stronger ramp for N2 in 2026 [6][7].

Investment Rating - The report maintains a "Buy" rating for TSMC, with an "Overweight" (OW) stance, suggesting accumulation ahead of the earnings print due to low expectations [1][6]. Core Insights - TSMC's preliminary revenue for 2Q25 was NT$933 billion, reflecting an 11% quarter-over-quarter (Q/Q) increase in TWD, translating to approximately US$29.6 billion, which is a 16% Q/Q increase in USD, exceeding both the company's guidance and Morgan Stanley's estimates [2][3]. - The likelihood of TSMC raising its full-year revenue guidance has increased, with expectations of a 27% year-over-year (Y/Y) growth in USD, driven by strong AI demand and tight leading-edge capacity [3][13]. - The report highlights that TSMC's fab utilization in the second half of 2025 remains robust despite lukewarm demand in smartphones and PCs, indicating a potential shift in demand dynamics [3][13]. Revenue and Earnings Guidance - TSMC is expected to raise its 2025 full-year revenue guidance from mid-20% to high-20% due to strong AI demand, with 3Q25 revenue projected to increase by 1% Q/Q in USD [17][18]. - The report forecasts a gross margin decline to 55.6% in 3Q25, with TWD revenue potentially decreasing by nearly 4% Q/Q due to TWD appreciation [15][17]. - The preliminary EPS estimate for 2Q25 is NT$14.40, with a gross margin around 57% [17]. Price Target and Valuation - The price target for TSMC remains NT$1,288, implying a 17% upside from the current share price of NT$1,100 [6][56]. - TSMC is trading at 17x the estimated EPS for 2026, which is considered attractive, with expectations of a re-rating to 20x due to increased bargaining power and sustainable AI demand [18][56]. Market Dynamics and Demand Drivers - The report notes that TSMC's wafer pricing strategy may be influenced by FX impacts, with expectations of a 3-5% price hike in 2026 due to strong demand and TWD appreciation [26][30]. - AI demand is projected to significantly contribute to TSMC's revenue, with expectations that cloud AI revenue will grow from 13% in 2024 to 34% by 2027 [37][40]. Semiconductor Tariffs and Regulatory Environment - The report discusses the potential for TSMC to receive an exemption from semiconductor tariffs due to its significant investment in US production, which could mitigate revenue risks associated with such tariffs [4][25].

Group 1: Company Performance - GE Aerospace's stock has increased over 50% year to date and over 300% in the last three years [1] - Taiwan Semiconductor's stock has gained 15% year to date and over 160% in the last three years [1] Group 2: Earnings Expectations - GE Aerospace's Q2 earnings are expected to rise 19% to $1.43 per share, with sales projected to climb 18% to $9.7 billion [3] - Taiwan Semiconductor's Q2 EPS is anticipated to increase 60% to $2.37, with sales expected to grow 44% to $30.04 billion [5] Group 3: Earnings Surprises - GE Aerospace has surpassed the Zacks EPS Consensus for 10 consecutive quarters, with an average earnings surprise of 17.97% [4] - Taiwan Semiconductor has exceeded earnings expectations for 18 consecutive quarters, with an average EPS surprise of 6.91% [7] Group 4: Future Estimates - FY25 and FY26 EPS estimates for GE Aerospace and Taiwan Semiconductor have trended higher over the last 60 days [8]