Dan Loeb's Bet On Taiwan Semiconductor Looks Strong As Q1 Results Top Expectations

Activist investor Dan Loeb‘s Third Point LLC held 1.78 million shares in Taiwan Semiconductor Manufacturing Company Ltd. TSM as of December 2024.

The chip manufacturer’s share price dipped nearly 27 year to date. Compared that to VanEck Semiconductor ETF SMH, which fell over 23%, and the S&P 500's year-to-date decline of roughly 12.1%.

Earnings & Other Notable Events:

On April 17, Taiwan Semiconductor reported first-quarter net sales of $25.53 billion (839.25 billion New Taiwanese Dollars). That’s up 41.6% year-over-year (Y/Y), topping the analyst consensus estimate of $23.92 billion.
The demand for advanced processor node technologies for artificial intelligence applications fueled the result.
Taiwan Semiconductor guided for second-quarter 2025 revenue of $28.4 billion to $29.2 billion versus the $26.79 billion analyst estimate. It expects a gross margin of 57% to 59% and operating profit margins of 47% to 49%.
Taiwan Semiconductor’s CFO said, so far, there has been no noticeable shift in customer behavior in response to U.S. tariffs.
Notably, China's new rule reportedly exempts chips designed by U.S. companies but manufactured in Taiwan from its 125% retaliatory tariffs. This rule has also exempted TSMC.
Also, the company disclosed in its 2024 annual report that the U.S. semiconductor technology embargo challenged its ability to ensure complete compliance with the rules.
Goldman Sachs analyst Kinger Lau, CFA, said delisting fears for Chinese American Depositary Receipts (ADRs) are rising again, driven by escalating trade tensions and new policy guidance from U.S. officials, including President Donald Trump‘s America First Investment Policy and Treasury Secretary Scott Bessent‘s statement that “everything is on the table” in the response to China’s retaliatory tariffs.