TSMC Q1 profits surges as Nvidia takes a $5.5 billion hit: How US-China trade wars are affecting the chip industry
- Marijan Hassan - Tech Journalist
- 3 days ago
- 2 min read
The ongoing trade tensions between the United States and China has cast a long shadow over the global semiconductor industry. But while some players are unsure of the future, others are thriving and remain overall optimistic about their continued success.
TSMC the outlier
TSMC’s net profit surged to T$361.6 billion ($11.1 billion) for the January to March period, beating analyst expectations and marking the fourth consecutive quarter of double-digit growth. Moreover, the company maintained its bullish full-year outlook, banking on continued demand for artificial intelligence chips. CEO C.C. Wei emphasized that “no change in customer behavior” has been observed so far, despite rising geopolitical risks.
For Q2, TSMC expects revenue of up to $29.2 billion—significantly higher than the $20.8 billion recorded a year earlier. Capital expenditure for the year remains unchanged at $38–42 billion.
Nvidia takes a hit
In contrast, Nvidia has revealed that it expects to take a $5.5 billion charge in its financial quarter ending April 27th. This significant blow comes after the US government tightened its AI chip export rules to China, impacting Nvidia's H20 chip, which was specifically designed to comply with previous export controls. The company now requires a special license to sell this chip in China for the "indefinite future."
The change, driven by national security concerns around China’s AI and supercomputing capabilities, led to a sharp after-hours sell-off, wiping billions from Nvidia’s market cap.
A global crisis
Despite this positive outlook, TSMC's shares have also fallen by 20% this year, reflecting broader market uncertainty surrounding US trade and tariff policies. Also worth noting, TSMC's revenue from China has decreased from 9% to 7% of its total sales, while North America's contribution has risen from 69% to 77%, suggesting that US export controls are having a tangible effect on their geographical revenue distribution.
US-based AMD shares also tumbled by 7% in after-hours trading while South Korean giants Samsung and SK Hynix also saw their shares dip by up to 3%.
In Europe, ASML - the Dutch supplier of chipmaking equipment - reported a €1 billion shortfall in expected Q1 orders, with its CEO citing the “increased uncertainty” from U.S. tariffs.
The uncertainty is also paralyzing smaller players. UK-based Alphawave IP Group, which designs chip technologies for data centers, has suspended its long-term financial forecast due to the “rapidly developing nature” of U.S. tariffs. This is despite a 34% jump in bookings last year.
Looking forward
The contrasting fortunes of TSMC and Nvidia highlight the complex nature of the US-China trade war on the semiconductor industry. The reality is some companies will still manage to navigate the challenges and capitalize on specific market demands, while others will suffer. Whether it’s the US or China that finally bows down remains to be seen.
