TSMC’s Earnings Are Coming. AI Chips Should Drive Growth Despite Tariff Fears.

Taiwan Semiconductor Manufacturing dominates the manufacturing of high-end chips. (Getty Images/Cultura RF)

Taiwan Semiconductor Manufacturing is set to report its earnings Thursday. The market is looking for continued healthy growth in artificial-intelligence chips and reassurance about tariffs.

The consensus call among analysts tracked by FactSet is that TSMC will report a second-quarter net profit of 372.34 billion New Taiwan dollars, or $12.65 billion. That would be up 50% from the same period a year earlier.

The company’s quarterly sales are set to have grown 39% to NT$933.8 billion, based on the company’s monthly disclosures of its sales figures, while TSMC has told investors to expect revenue growth in the mid-20% range for the full year. The driver is likely to be revenue from AI-related chips, which TSMC has previously said it expects to double in 2025 and grow at a mid-40% annual rate for the next five years.

A vital question for TSMC will be its gross margin and the outlook for the figure for the rest of the year. It stood at 58.8% for the first quarter but analysts at Jefferies expect that to trend down toward 55%-56% over the year as the company faces higher utility costs during summer in Taiwan.

TSMC is the main contract manufacturer for AI chip leader Nvidia . It also makes the core processors inside Apple iPhones, Qualcomm mobile chipsets, and processors made by Advanced Micro Devices.

So far, TSMC has avoided being subject to any tariffs because the White House has exempted semiconductors, semiconductor manufacturing equipment, PCs, and smartphones from its planned levies. However, the U.S. Department of Commerce is investigating whether tariffs should be imposed on national security grounds.

Chipmaking equipment manufacturer ASML , which sells tools to TSMC, warned on Wednesday that growth in 2026 was no longer guaranteed due to economic and geopolitical uncertainty.

That means there will be plenty of attention on any comments from TSMC about its progress in building three new chip plants in the U.S., part of a total investment package of $165 billion, which could offset concerns about tariffs and provide evidence of its confidence in domestic chip demand. TSMC has said it intends to manufacture chips using its newest 2-nanometer process in Arizona as early as 2028.

Write to Adam Clark at adam.clark@barrons.com