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TSMC Revises First-Quarter Revenue Forecast Due to January Earthquake Impact

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Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s leading contract chipmaker, revised its first-quarter revenue outlook on Monday, indicating that it would be closer to the lower end of its guidance. This revision comes after the company reported an estimated $161 million loss from the earthquake that struck southern Taiwan in late January.

TSMC, which supplies major companies such as Apple and Nvidia, calculated the losses from the earthquake at approximately NT$5.3 billion ($161 million), accounting for insurance claims. Despite the financial setback, the company clarified that there was no structural damage to its production facilities, and operations have resumed as usual.

The earthquake resulted in the destruction of some semiconductor wafers, affecting production. However, TSMC is actively working to recover the lost output and confirmed that its full-year outlook remains unchanged. The revised first-quarter revenue forecast now expects to fall within the range of $25 billion to $25.8 billion, closer to the lower end of the initial estimate.

AMD’s AI Strategy Faces Investor Scrutiny Amid Shift to Custom Chips

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Advanced Micro Devices (AMD) faces heightened investor scrutiny over its artificial intelligence (AI) strategy as Big Tech firms increasingly develop custom silicon, potentially limiting AMD’s role in AI infrastructure. The company is set to report its fourth-quarter earnings on Tuesday, with analysts forecasting a 22% revenue surge to $7.53 billion. However, competition from Nvidia and the growing adoption of proprietary chips by Microsoft, Amazon, and Meta have raised concerns about AMD’s long-term AI growth prospects.

Tech giants are ramping up investments in in-house AI chip development, benefiting companies like Broadcom and Marvell Technology, which provide hyperscalers with custom AI processors. Broadcom expects AI to represent a $90 billion revenue opportunity by 2027, a factor that helped its stock more than double last year. Marvell saw an 83% rise, while AMD’s stock fell 18% in 2024.

Despite this shift, AMD’s AI processor sales are expected to reach up to $10 billion in 2024, double its initial forecast of $5 billion. Its data center chip segment, projected to grow 82% to $4.15 billion in Q4, is expected to drive over half of total revenue. Meanwhile, its personal computer division is forecasted to rise 33% to $1.94 billion, as AMD continues to gain market share from Intel.

Supply chain constraints remain a challenge, with TSMC working to expand production capacity for AI chip packaging. However, Nvidia’s ramp-up of its latest “Blackwell” AI chips could limit AMD’s ability to secure additional manufacturing resources.

Despite these hurdles, AMD’s fourth-quarter net income is set to rise by more than 61% to $1.08 billion, reflecting strong demand for its products.

 

ASML to Halt Reporting of Key Metric, Citing Volatility

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ASML, the world’s leading chip equipment manufacturer, has announced it will stop publishing new order bookings, a key metric closely watched by investors. The company argues that the figure is too inconsistent and causes excessive volatility in its stock price.

Instead, ASML believes its own forecasts—based on discussions with chipmakers about their capacity expansion plans—offer a more reliable indicator of future performance. The company’s circuit-printing machinery plays a critical role in chip manufacturing, but orders can take six to 18 months to fulfill, making quarterly booking figures difficult to interpret.

“The swing factor is significant,” said Chief Financial Officer Roger Dassen, explaining the move.

The decision, announced on Wednesday, came as ASML’s stock jumped 7% following better-than-expected fourth-quarter bookings of €7.1 billion ($7.4 billion), a sharp increase from the €2.6 billion recorded in Q3. The fluctuation was likely driven by timing of orders from TSMC, which recently unveiled a $38 billion capital expenditure plan for 2025.

While analysts acknowledge the downside of losing insight into short-term order trends, they largely understand ASML’s reasoning.

“There is downside for investors, as we lose visibility on average bookings and backlog confidence,” said Sara Russo of Bernstein. However, she agreed that a single quarter’s bookings are not the best measure of long-term business health.

Michael Roeg of Degroof Petercam added that capital expenditure announcements from major clients such as TSMC, Intel, and Samsung already provide sufficient indicators of future demand.

Despite market fluctuations, Dassen emphasized that ASML’s full-year sales and margins remained aligned with its January 2024 forecasts.

“If you put all those quarters together, you see it wasn’t too shabby, was it?” he remarked.