Macquarie: TSMC's recent profit margin may have peaked in the first quarter

They wrote that, driven by ongoing AI demand and its leading position in advanced nodes, this chip manufacturer may provide guidance for quarter-on-quarter revenue growth in the second quarter. They stated, however, that as this Taiwanese company expands its 3-nanometer chip production capacity and its 2-nanometer chips enter mass production, its profit margin in the first quarter may face some pressure. Meanwhile, external cost pressures may persist, with geopolitical disruptions leading to higher average chemical prices. Macquarie expects TSMC's gross margin to decrease from an estimated peak of about 64% in the first quarter to around 62.4% in the second quarter. Nevertheless, these analysts believe TSMC's long-term growth fundamentals remain solid.