0512 GMT - Taiwan dollar's appreciation versus the U.S. dollar may hurt local tech exporters' profits, says Arisa Liu, research fellow at Taiwan Institute of Economic Research. Revenue of chip makers, such as TSMC, is mostly denominated in the USD. When the USD depreciates and is converted to the stronger TWD, the value of the consolidated revenue in USD decreases, thus compressing their profit margins. TSMC has previously said that when the USD depreciates by 1% against the TWD, TSMC's operating profit margin decreases by 0.4 percentage points. However, TSMC's expanding production in the U.S. could mitigate some forex impact in the long term, she says. TSMC's leading technology and long-term contracts with clients should also partially cushion the impact, she adds. (sherry.qin@wsj.com)
(END) Dow Jones Newswires
May 06, 2025 01:12 ET (05:12 GMT)
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