Core Viewpoint - Qualcomm's stock experienced a significant drop due to warnings about losing Apple as a customer for its modem business and disappointing smartphone chip revenue in its latest earnings report [1][6]. Financial Performance - For Q3 ending June 29, Qualcomm reported revenue of $10.37 billion, a 10% year-over-year increase, but below the analyst expectation of $10.62 billion [5]. - Adjusted net profit was $2.67 billion, up 25% year-over-year, with adjusted earnings per share at $2.77, exceeding the forecast of $2.72 [5]. - The QCT segment (mainly chip business) generated $8.993 billion in revenue, an 11% increase, with smartphone chip revenue at $6.328 billion, which was below the expected $6.48 billion [5]. Customer Dependency and Future Outlook - Qualcomm warned that it may lose Apple as a customer for its modem chips in the coming years as Apple shifts to in-house developed chips [6][7]. - Qualcomm previously earned over $5 billion annually from its partnership with Apple, but the future of this relationship is uncertain [7]. - The company is diversifying its revenue streams by focusing on non-mobile markets such as automotive and IoT, with a reported 15% growth in revenue from non-Apple customers [8]. Market and Regulatory Challenges - Qualcomm faces potential tariffs on semiconductor imports, which could disrupt supply chains and negatively impact smartphone revenue [3][9]. - There are concerns regarding the implementation of tariffs that could range from 25% to 100%, which may affect the semiconductor industry significantly [10][12]. - The geopolitical landscape and trade restrictions are creating challenges for the semiconductor sector, as highlighted by ASML's warnings about growth prospects [13][14].

Group 1 - The Trump administration will announce the results of a national security investigation into semiconductor imports within two weeks, raising concerns about potential new tariffs on chips [1] - The investigation, initiated on April 13, focuses on the semiconductor industry and the entire electronic supply chain, potentially laying the groundwork for new tariffs under Section 232 of the Trade Expansion Act of 1962 [1] - Barclays has indicated that the timeline for imposing semiconductor tariffs is becoming clearer, with implementation likely after mid-August and no later than September [1] Group 2 - President Trump stated that many companies will invest in semiconductor manufacturing in the U.S. to avoid the impact of new tariffs, while the European Commission President has found a "better way" to circumvent the upcoming chip tariffs [2] - The U.S. has reached a 15% tariff agreement with the EU, which will increase investments in the U.S. by $600 billion and purchase $750 billion worth of U.S. energy products, while maintaining the current steel and aluminum tariffs [2] - The Trump administration is investigating the national security threat posed by reliance on foreign pharmaceuticals and semiconductor imports, alongside separate investigations into copper and lumber imports [2]

Core Viewpoint - The implementation of U.S. semiconductor tariffs is expected to occur between mid-August and September, with potential impacts exceeding market expectations [1][2][3]. Tariff Implementation Timeline - Barclays reports that the timeline for the semiconductor tariffs is becoming clearer, likely to be implemented after mid-August and no later than September [2][6]. - The U.S. Commerce Department is expected to submit a report on the national security trade investigation within 270 days, followed by a 90-day decision period for the President [5][6]. Tax Rate Expectations - The market's optimistic expectation of a uniform 25% tariff may be overly idealistic, with Barclays suggesting a potential incremental tax model instead [3][7]. - An incremental tariff model could start with a lower rate and gradually increase, allowing the industry time to adjust [7]. - There may also be differentiated tax rates for different countries, similar to the steel industry [8]. Impact on the Semiconductor Industry - The 232 tariff is viewed as a significant risk for the semiconductor industry, with potential impacts that could exceed market expectations [9]. - Semiconductor equipment may face phased taxation, contrary to previous expectations of exemptions [9]. - AI chips, despite assumptions of exemption, are also at risk of being taxed [10]. - The implementation of tariffs is expected to negatively impact semiconductor demand in the second half of 2025 and into 2026 [11]. Industry Responses - Major semiconductor companies are advocating for exemptions on equipment and materials, emphasizing the need for policies that support U.S. manufacturing competitiveness [13][14]. - Texas Instruments and TSMC have expressed concerns that tariffs could increase costs and delay U.S. wafer fabrication projects [14].

Group 1: TSMC's Investment and Pricing Strategy - TSMC plans to invest $165 billion in capacity expansion in the U.S., which may increase its chances of tariff exemptions [1] - TSMC's management indicated that potential semiconductor tariffs could suppress electronic product demand and reduce company revenue [1] - Due to inflation and potential tariff costs, TSMC expects profit margins from overseas factories to erode by 3-4 percentage points in the later years of the next five years [1] Group 2: Wafer Pricing and Currency Impact - TSMC is expected to increase wafer prices by 3%-5% globally due to strong demand for advanced processes and structural currency trends [2] - U.S. customers are reportedly locking in higher quotes for 4nm capacity at TSMC's U.S. factories, with plans to raise wafer prices by at least 10% [2] Group 3: 2nm Capacity Expansion - TSMC plans to start mass production of 2nm technology in the second half of 2025, with significant demand anticipated [5] - The projected capacity for 2nm will be 10k wafers per month (kwpm) in 2024, increasing to 40-50 kwpm in 2025, and reaching 90 kwpm by the end of 2026 [5] - Major clients for 2nm technology will include Apple, AMD, and Intel, with Apple expected to adopt the technology in Q4 2025 [5][6] Group 4: AI and Cryptocurrency Demand - By the end of 2026, AI ASICs will begin utilizing 2nm capacity, with increased usage expected in 2027 [6] - The contribution of cloud AI semiconductor business to TSMC's revenue is projected to rise from 13% in 2024 to 25% in 2025, and further to 34% by 2027 [12] Group 5: B30 GPU and Market Demand - TSMC's Blackwell chip production is expected to align with the demand from NVL72 server rack shipments, with a projected shipment of 30,000 racks in 2025 [10] - The design of the Chinese version of the B30 GPU is anticipated to be similar to the RTX PRO 6000, with demand continuing to grow [12] - If the B30 can be sold in China, it could account for 20% of TSMC's revenue growth in 2026 [12]

Core Viewpoint - TSMC's investment in the U.S. will not affect its existing projects in other regions, countering reports from The Wall Street Journal regarding delays in its Japan expansion due to U.S. tariffs [1][2]. Group 1: U.S. Investment and Expansion - TSMC is taking U.S. tariff threats seriously and is reallocating resources to accelerate its investment in Arizona, where a large chip manufacturing center is under construction [3]. - The company has committed to a $100 billion investment to build three additional fabs, two integrated circuit assembly plants, and a research center [6]. Group 2: Japan Expansion - TSMC's first wafer fab in Kumamoto, Japan, began production at the end of last year, while the second fab's construction has been slightly delayed due to local transportation issues [5]. - Although there is no confirmed timeline for the second fab's construction, reports suggest it may face further delays [6]. Group 3: Global Operations - TSMC is also constructing a new fab in Dresden, Germany, which is expected to start production in 2027 [7]. - The company’s global expansion strategy is influenced by various factors, including customer demand, business opportunities, operational efficiency, government support, and overall costs [1].

Core Viewpoint - The company anticipates moderate growth in revenue in the second half of the year, with a healthy overall growth outlook for the year despite uncertainties related to tariffs and currency fluctuations [1][2]. Group 1: Financial Performance - In May, the company's consolidated revenue was approximately 3.55 billion, a decrease of 3.38% month-over-month and a decrease of 0.56% year-over-year [1]. - For the first five months of the year, consolidated revenue reached approximately 19.17 billion, reflecting a year-over-year increase of 15.57% [1]. - The company's net profit after tax for Q1 was approximately 2.41 billion, representing a quarter-over-quarter increase of 30.7% and a year-over-year increase of 89.8%, marking a nine-quarter high [1]. Group 2: Market Conditions and Customer Demand - The company has observed a "dulling" effect of tariff uncertainties, with customers showing strong demand and placing urgent orders, particularly in the automotive, industrial, and consumer electronics sectors [2]. - Despite the challenges posed by tariffs, customer orders from IDM and IC design companies have increased, indicating a positive market outlook [2]. Group 3: New Facility Developments - The construction of the 12-inch fab in Singapore is progressing well, with production expected to begin in Q1 2027, potentially ahead of schedule [3]. - The company plans to move equipment into the facility in Q4 and anticipates producing samples for customers in the second half of 2026 [3]. - There is significant interest from customers regarding the new facility, and recruitment for the plant is proceeding smoothly, attracting global talent [4].

Core Viewpoint - The potential implementation of a 25% tariff on semiconductor chips by the Trump administration could significantly harm the U.S. economy, leading to a projected GDP loss of $1.4 trillion over ten years, which is approximately 4.8% of the GDP in the tenth year [1]. Economic Impact - The ITIF report estimates that the first year of the tariff could result in a 0.18% decline in U.S. economic growth [1]. - Cumulative tax revenue losses for the U.S. government could reach $165 billion over ten years, exceeding the revenue generated from the tariffs by several billion dollars [1]. Consumer Impact - The average American's standard of living is projected to decrease by $122 in the first year due to the tariff, accumulating to $4,208 over ten years [1]. Industry-Specific Effects - The increased cost of semiconductors will raise the expenses associated with training AI models, potentially diminishing U.S. competitiveness in the AI sector, while China may gain a leading position due to substantial subsidies in AI and semiconductor industries [1]. - In the automotive sector, the report indicates that the value of semiconductors in each vehicle could rise to $4,000 by 2030, an increase of 800% from 2020, which will particularly impact the electric vehicle industry that requires significantly more semiconductors [2]. - The U.S. semiconductor manufacturing industry is still in its early stages, producing only 12% of the global semiconductor supply, which could lead to supply chain challenges if automotive manufacturers shift to domestic suppliers [2]. Supply Chain Considerations - TSMC's Arizona subsidiary has urged the U.S. government to carefully consider the implications of semiconductor tariffs on the overall supply chain and national security interests, seeking potential tax exemptions [2].

Core Viewpoint - TSMC has issued a strong warning against potential U.S. semiconductor tariffs, stating that such measures could jeopardize its investment plans in Arizona, which amount to $165 billion [1][3][4]. Group 1: TSMC's Investment Plans - TSMC plans to invest $165 billion in the U.S., which includes the construction of six advanced wafer fabs, two advanced packaging plants, and one R&D center, marking the largest single foreign direct investment in U.S. history [3][4]. - The company emphasizes that its investment will create significant job opportunities, including 40,000 jobs during the construction phase and thousands of semiconductor manufacturing and R&D positions once operational [4]. Group 2: Response to U.S. Tariffs - TSMC's letter to the U.S. Department of Commerce strongly suggests that any tariffs or import controls should not undermine U.S. national security goals, including TSMC's investment plans in Arizona [3][4]. - The letter is viewed as one of TSMC's most forceful responses to the potential tariffs, indicating that the company might reconsider its investment if tariffs are imposed [3][4]. Group 3: Economic Impact and Industry Reactions - TSMC's investment is expected to generate $200 billion in indirect economic benefits for the U.S. [4]. - The Taiwanese media and political figures have expressed concern over the government's response to TSMC's position, questioning the adequacy of support from the Taiwanese authorities in light of U.S. pressures [5][6][7].

Core Viewpoint - The U.S. semiconductor industry is advocating for the reduction of tariffs on semiconductor manufacturing inputs, highlighting the potential cost increases associated with tariff hikes [1] Group 1: Industry Concerns - The U.S. Semiconductor Association indicates that a 1% increase in tariffs on semiconductor manufacturing inputs could lead to a 0.64% rise in total construction costs for factories [1] - The semiconductor industry is urging the U.S. Department of Commerce to alleviate tariff burdens amid an ongoing Section 232 investigation into the global semiconductor sector [1] Group 2: Company Actions - Leading companies such as TSMC and Intel have submitted comments to the U.S. Department of Commerce in early May, opposing the imposition of tariffs on semiconductors and related equipment and materials [1] - These companies are advocating for policies that encourage semiconductor production rather than imposing additional financial burdens [1]

Core Viewpoint - The proposed semiconductor tariffs by the U.S. Department of Commerce could significantly impact the semiconductor industry, particularly affecting the cost of building and operating fabs, with potential increases in investment requirements for major companies like TSMC [1][2]. Impact of Semiconductor Tariffs - The semiconductor industry is preparing for tariffs that may take effect as early as June, with major players like SK Hynix and HP involved in the public consultation process [1]. - A 1% increase in tariffs on semiconductor manufacturing inputs could raise the total cost of building a fab by 0.64% [1]. - Under a 10% tariff scenario, TSMC would need an additional investment of $6.4 billion to meet its initial $100 billion target [1]. - The cost of building and operating fabs in the U.S. is already 30% to 50% higher than in Asia, and tariffs on equipment and materials would exacerbate this disparity [1]. - For every $1 increase in chip prices, the end products containing semiconductors would need to increase by $3 to maintain existing profit margins [1]. Characteristics of Affected Chips - Mature node chips, which account for over 80% of global production but only about 40% of revenue, are expected to be the most affected by the tariffs [2]. - These mature chips support downstream industries valued at over $10.8 trillion, making the tariffs a potentially disruptive force in the global tech ecosystem [2]. - Tariffs may vary based on the "wafer origin," meaning the actual production location of the chips, with rates potentially ranging from 25% to 100% [2].