Q1 '25 Foundry Earnings: Hit Or Miss?
Updated: Tower reports positive results; Other results: Hua Hong, GlobalFoundries, Samsung, Intel, UMC, TSMC
By Mark LaPedus
The earnings season is here again. Foundry vendors are reporting mixed financial results for the first quarter of 2025. And the outlook among foundry vendors is also mixed for the second quarter of 2025 and beyond.
Here are the latest financial results from the leading foundry vendors:
Tower
On May 14, Israel’s Tower Semiconductor, a foundry vendor, reported its results for the first quarter ended March 31.
Revenues for the first quarter of 2025 were $358 million as compared to $327 million for the first quarter of 2024, representing 9% year-over-year revenue growth.
Net profit for the first quarter of 2025 was $40 million, reflecting $0.36 basic and $0.35 diluted earnings per share. First quarter of 2024 net profit was $45 million, reflecting $0.40 basic and diluted earnings per share, having been positively impacted by a non-recurring income tax benefit.
Tower Semiconductor guides revenues for the second quarter of 2025 to be $372 million, with an upward or downward range of 5%, reflecting 6% year-over-year revenue increase.
Russell Ellwanger, chief executive of Tower Semiconductor, stated: “Tower delivered continued record revenue in RF infrastructure, which includes SiPho and SiGe. We target further revenue growth of these technologies throughout the year, increases in our high voltage 200mm power management business and higher revenue levels in our sensors business. Additionally, we have entered a new served market for Tower, namely envelope trackers, using our 300mm technology platform. In the face of geo-political uncertainties, we are leveraging Tower’s global scale and technology breadth into new opportunities.”
Hua Hong
On May 8, China’s Hua Hong Semiconductor, a pure-play foundry, reported its consolidated operational results for the quarter ending March 31.
Revenue was US$540.9 million, 17.6% over 1Q 2024 and 0.3% above 4Q 2024. Net profit attributable to shareholders of the parent company was US$3.8 million, compared to US$31.8 million in 1Q 2024 and net loss attributable to shareholders of the parent company of US$25.2 million in 4Q 2024.
For the second quarter, the company expects revenue to be approximately US$550 million to US$570 million.
Peng Bai, president and executive director of the company, said: "First quarter 2025 sales revenue for Hua Hong Semiconductor was 541 million US dollars, and gross margin reached 9.2%, both in line with guidance. Overall performance has continued the trend from 2024. Sales revenue maintained steady growth; the product portfolio has been continuously optimized; and the utilization rate has remained at full capacity. The capacity ramp-up of the second 12” production line is in line with our expectation, which has positive implications for subsequent revenue growth, product portfolio optimization and enhancement of the company’s core competitiveness."
Bai continued, "From market perspective, customer demand and competitive landscape have essentially continued the trend since the second half of 2024. However, due to recent changes in the global environment and related policies, the entire semiconductor industry will face greater uncertainties in terms of customer demand, procurement costs, and the supply chain landscape. In the face of such uncertainties, Hua Hong Semiconductor will adhere to its strategy of continuously accelerating effective capacity expansion, enhancing its R&D capabilities, actively exploring marketing opportunities, timely managing possible disturbances from the supply side, intensively reduce cost and improve efficiency, to reduce risks while achieving better performance."
GlobalFoundries
On May 6, GlobalFoundries (GF), the world’s fourth largest foundry vendor, reported its financial results for the first quarter ended March 31.
Revenue for the quarter was $1.585 billion, down 13% from the previous quarter but up 2% from the like period a year ago. Net income was $211 million for the quarter, up 129% from the previous quarter and up 57% from a year ago.
"In the first quarter, the GF team delivered strong financial results at the high end of the Non-IFRS guidance ranges for revenue, gross margin, and earnings per share,” said Tim Breen, the new chief executive of GF.
For the second quarter, GF’s sales are expected to be $1.675 billion, plus or minus $25 million. GF’s capital spending target remains $700 million in 2025, up 12% from 2024, according to TD Cowen.
“GFS March '25 revenues were in line with street forecasts, while guidance was also in line at +6% quarter-over-quarter, reflecting seasonal improvements in mobile,” said Krish Sankar, an analyst with TD Cowen, in a research note. “The revenue impact from tariffs was not quantified, but we believe it could be more of a factor for mobile and consumer IoT demand in C2H25. Near term, higher input costs from tariff are leading to a ~$20M annualized impact to COGS (cost of goods sold).”
GF’s outlook is a mixed picture for 2025. “Positive drivers include strength in automotive from design win ramps and strong growth from comms/DC customers. Mobile and consumer/IoT segments could see some demand risks from tariffs and despite new design wins across RF front-end and WiFi7 related technologies,” Sankar said.
Samsung
On April 30, South Korea’s Samsung Electronics reported its financial results for the first quarter ended March 31, 2025.
Samsung posted mixed results amid lackluster demand and product setbacks in the quarter. In the overall memory market, uncertainty with the tariffs is causing buyers of DRAM and NAND devices to stockpile these products. Plus, contract memory prices are expected to increase.
Samsung posted KRW 79.14 trillion (US$55.0 billion) in consolidated revenue, an all-time quarterly high, on the back of strong sales of its flagship Galaxy S25 smartphones and other products. Sales were up 4% from the previous quarter and up 10% year-over-year.
Operating profit increased to KRW 6.7 trillion (US$4.7 billion) despite headwinds for the DS Division, which experienced a decrease in quarterly revenue. Operating profit was up 0.2% from the previous quarter and up 0.1% year-over-year.
Samsung’s semiconductor unit, called the DS Division, posted mixed results. Sales were down 17% from the previous quarter but up 9% year-over-year. Operating profit was down 1.8% from the previous quarter and down 0.8% year-over-year.
Samsung’s memory business was driven by expanded server DRAM sales and a rebound in demand for NAND. “However, overall earnings were impacted by the erosion of average selling price (ASP), as well as a decrease in HBM sales due to export controls on AI chips and deferred demand in anticipation of upcoming enhanced HBM3E products,” according to Samsung. “Earnings for the foundry business were muted due to sluggish seasonal mobile demand, inventory adjustments and stagnant fab utilization.”
In the foundry segment, Samsung hopes to ramp up its 2nm process by the second half of 2025. TSMC is also ramping up its 2nm technology. Intel is ramping up 18A, a 1.8nm technology.
Thanks to a boom in the high bandwidth memory (HBM) market, SK Hynix has overtaken Samsung for the first time in the worldwide DRAM business in terms of market share, according to Counterpoint Research.
SK Hynix continues to see strong demand for HBM. The company has dominated the HBM market with 70% market share, according to Counterpoint. Micron is also seeing strong demand for HBM, but Samsung is struggling in the arena.
All memory suppliers are still evaluating the impact of the tariffs. But the tariffs are causing buyers of DRAM and NAND to stockpile these products, according to TrendForce.
Thus, memory contract prices are set to rise in the second quarter of 2025, according to TrendForce. “Lingering uncertainty over the direction of U.S. trade policy has driven memory buyers to adopt a more defensive stance—actively raising DRAM and NAND flash inventory levels as a buffer against supply risk,” according to the firm.
TrendForce notes that this proactive stockpiling has expanded the anticipated contract price increases for both DRAM and NAND flash in the second quarter. “However, this surge in momentum is likely to be short-lived,” according to the firm.
Intel
Amid a major restructuring effort, Intel reported a large loss on flat sales in the first quarter of 2025.
Intel’s foundry unit continues to spill red ink. The company also reduced its capital expenditure target to $18 billion for 2025, down from the company's previous target of $20 billion. Reports have also surfaced that Intel will have another round of layoffs.
Intel reported its results on April 24. First-quarter revenue was $12.7 billion, flat year-over-year. Net loss attributable to Intel was $800 million in the first quarter, compared to a loss of $400 million in the like period a year ago.
Intel continues to lose money in the foundry business. The foundry unit has reported several consecutive quarterly losses. The foundry unit reported a loss of $2.3 billion on sales of $4.7 billion in the first quarter of 2025. This compares to a loss of $2.2 billion on sales of $4.3 billion in the previous quarter. A large percentage of those sales come from Intel’s own product lines.
Intel is taking actions to drive more efficient execution across the business. The plan includes streamlining the organization and eliminating management layers.
“The first quarter was a step in the right direction, but there are no quick fixes as we work to get back on a path to gaining market share and driving sustainable growth,” said Lip-Bu Tan, Intel’s new chief executive. “I am taking swift actions to drive better execution and operational efficiency while empowering our engineers to create great products. We are going back to basics by listening to our customers and making the changes needed to build the new Intel.”
In March, Intel appointed Tan, a semiconductor industry veteran, as its new chief executive. At the same time, the company is ramping up its next-generation process, dubbed 18A.
For the second quarter of 2025, Intel expects that its sales will range from $11.2 billion to $12.4 billion.
UMC
On April 23, United Microelectronics Corp. (UMC), the world’s fourth largest foundry vendor, reported its results for the first quarter of 2025.
First quarter consolidated revenue was NT$57.86 billion (US$1.74 billion), down 4.2% from the previous quarter. Compared to a year ago, sales increased 5.9%. Net income attributable to the shareholders of the parent was NT$7.78 billion (US$234 million), down 8.5% from the previous quarter and down 25.6% from the like period a year ago.
In the first quarter, revenue contribution from UMC’s 22nm/28nm processes was 37% of wafer revenue, compared to 34% from the previous quarter. 40nm contribution remained at 16% of sales. Overall fab utilization rate in the first quarter slightly declined to 69%, compared to 70% in the previous quarter.
“Our results in the first quarter were in line with previous guidance, with flattish wafer shipments and the one-time pricing adjustment at the beginning of the year to reflect market conditions. First-quarter highlights include 22nm/28nm revenue hitting a record high, representing 37% of total sales. That was driven by a 46% quarter-over-quarter increase in 22nm revenue from products such as OLED display driver ICs, image signal processors as well as digital TV, WiFi and audio codec chips,” said Jason Wang, co-president of UMC.
“Looking ahead to the second quarter, we are expecting a moderate rebound in demand across all segments according to near-term alignment with customers. Beyond that, we are cautious about wafer demand projections as policies and markets are still adjusting to the recent tariff announcements,” Wang said.
For the second quarter of 2025, UMC provided the following guidance:
*Wafer shipments: Will increase by 5-7%
*Average selling prices: Will remain flat
*Capacity utilization: mid-70% range
*2025 CapEx: US$1.8 billion
UMC recently inaugurated its new Singapore-based Phase 3 fab, which will provide additional 22nm capacity to support future growth. Pilot runs are underway and is on schedule to ramp up to volume production early 2026.
TSMC
Despite a growing number of challenges in the market, TSMC’s first-quarter financial results and its outlook were above Wall Street’s estimates.
Taiwan’s TSMC, the world’s largest foundry vendor, saw robust demand for various AI-related chips and other products in the first quarter of 2025. In response to the demand, TSMC continues to build new fabs in Taiwan as well as Japan and the United States. In fact, the company has no less than 11 fabs in construction or on the drawing board in Taiwan.
The company also dropped hints that there is no plan to form a joint fab venture with Intel. That disclosure was viewed as positive news. Proposed by the Trump administration, the proposed TSMC-Intel fab venture was simply a terrible idea. Going forward, TSMC faces several unknowns and challenges. It’s unclear how the tariffs will impact TSMC and the rest of the semiconductor industry. TSMC’s sales in China will also take a hit.
Nonetheless, on April 17, TSMC reported sales of US$25.53 billion in the first quarter of 2025, an increase of 41.6% year-over-year but down 3.4% from the previous quarter. For the fourth quarter, TSMC reported a net income of US$10.997 billion, an increase of 60.3% year-over-year but down 3.5% from the previous quarter.
TSMC’s revenue was slightly above the midpoint of the company’s guidance. “Our business in the fourth quarter was impacted by smartphone seasonality, partially offset by continued growth in AI-related demand,” said C.C. Wei, TSMC’s chairman and chief executive, during a conference call.
TSMC’s high-performance computing (HPC) business, which includes AI chips from AMD, Nvidia and others, increased 7% quarter-over-quarter to account for 59% of the company’s first quarter revenue. The company’s smartphone segment decreased 22% to account for 28%, and IoT decreased 9% to account for 5%. Automotive increased 14% and accounted for 5% and DCE increased 8% to account for 1%.
In the first quarter, shipments of 3nm accounted for 22% of total wafer revenue, 5nm accounted for 36%, and 7nm accounted for 15%. Advanced technologies, defined as 7nm and more advanced technologies, accounted for 73% of total wafer revenue.
TSMC also disclosed more details about its results and talked about its future plans. Here are five of the main highlights:
1-Possible fab venture with Intel
As reported, TSMC and Intel were exploring a joint fab venture. That does not appear to be in the cards. “I would also like to mention that TSMC is not engaged in any discussions with other companies regarding any joint venture, technology licensing, or technology transfer and sharing,” Wei said.
Most applauded the disclosure. That was a bad idea from the beginning.
2-Tariffs
TSMC is still assessing the impact of the tariffs. “We understand there are uncertainties and risks from the potential impact of tariff policies. However, we have not seen any change in our customers' behavior so far. Therefore, we continue to expect our full year 2025 revenue to increase by close to mid-20s percent in US dollar terms,” Wei said.
3-Outlook
For the second quarter 2025, TSMC’s sales are expected to be between US$28.4 billion and US$29.2 billion, which represents a 13% sequential increase or a 38% year-over-year increase at the midpoint.
“We continue to observe robust AI related demand from our customers throughout 2025. We reaffirm our revenue from AI accelerators to double in 2025,” Wei said.
TSMC’s AI chip sales could take a major hit, however. On April 9, the U.S. government informed Nvidia that the chip company requires a license to export its H20 GPU to China. That means Nvidia may be restricted from selling the device to China. Nvidia is expected to take a charge of approximately $5.5 billion associated with H20 products for inventory, purchase commitments, and related reserves.
That will likely take a bite from TSMC’s sales. TSMC makes most, if not all, of Nvidia’s GPUs, including trailing- and leading-edge devices.
Still, TSMC is seeing strong demand from Nvidia and others in the AI space. “Other than China, the demand is still very strong, especially in the U.S. And so we are confident that we are going to double our AI revenue this year,” he said.
4-2nm and beyond
TSMC’s 2nm process, called N2, is on track for volume production in the second half of 2025. A more advanced version, dubbed N2P, is due out in the second half of 2026. The next process, called A16, is slated for volume production in the second half of 2026.
5-CapEx: Fab and packaging plans
TSMC reiterated its capital spending plans for 2025. The company’s capital spending is expected to be between US$38 billion and US$42 billion. About 70% of the capital budget will be allocated for advanced process technologies. About 10% to 20% will be spent for specialty technologies and about 10% to 20% will be spent for advanced packaging, testing, mask-making and others.
“In Taiwan, with support from the Taiwan government, we plan to build 11 wafer manufacturing fabs and four advanced packaging facilities over the next several years. Volume production of N2 is expected to start in second half 2025, and we are preparing for multiple phases of 2nm fabs in both Hsinchu and Kaohsiung Science Parks to support the strong structural demand from our customers,” Wei said.
The company’s 2025 capital spending budget also includes a small amount related to its new $100 billion investment plans in Arizona. TSMC is already building a trio of fabs in Arizona. On top of that, the company plans to build three new fabrication plants, two advanced packaging facilities and an R&D center.
“Our first fab in Arizona has already successfully entered high-volume production in 4Q ‘24, utilizing N4 process technology, with a yield comparable to our fabs in Taiwan. The construction of our second fab, which will utilize the 3nm process technologies, is already complete, and we are working on speeding up the volume production schedule, based on the strong AI-related demand from our customers,” Wei said. TSMC plans to bring up its second fab in Arizona a couple of quarters ahead of schedule.
“Our third and fourth fab will utilize N2 and A16 process technologies, and with the expectation of receiving all the necessary permits, is scheduled to begin construction later this year. Our fifth and sixth fab will use even more advanced technologies. The construction and ramp schedule for this fab will be based on our customers' demand,” he said.
In addition, TSMC is ramping up a fab in Japan, which is making chips using mature processes. That fab moved into production in late 2024. “The construction of our second specialty fab (in Japan) is scheduled to start later this year, subject to the readiness of the local infrastructure,” he said.
Reports have surfaced that TSMC has slowed down its fab plans in Japan. “Are we considering in slowing down? The answer is no,” he said.
Packaging is also important for TSMC. In recent times, TSMC’s has experienced a shortage of advanced packaging capacity, especially its CoWoS technology. “Based on our customers' strong demand, we are also working hard to double our CoWoS capacity in 2025 to support their needs,” Wei said.