Taiwan Semiconductor Manufacturing Company (TSMC) is currently navigating a challenging landscape marked by soaring demand for AI chips, rising trade tensions, and geopolitical risks that threaten the stability of global semiconductor supply chains. At TSMC’s recent annual shareholders meeting in Hsinchu, CEO C.C. Wei expressed optimism, stating that the company anticipates record revenue and profit this year.
Despite the positive outlook, TSMC faces challenges related to the indirect effects of U.S. tariffs and intense demand from AI applications. Wei acknowledged that while tariffs impact the company indirectly, they can lead to increased prices that may dampen demand. He reassured stakeholders that TSMC remains well-positioned, emphasizing, “Our business will still be very good,” while expressing concern about potential economic decline.
The effects of tariffs have created uncertainty within the semiconductor sector, especially since the administration previously imposed substantial duties on Taiwanese imports, which were later paused. Nevertheless, TSMC’s core business continues to thrive, driven largely by robust demand for AI chips, with customers like Apple and Nvidia significantly contributing to this growth. The company reported impressive revenue figures for April, indicating a substantial increase compared to the previous year.
TSMC is actively working to enhance production capacity to meet rising AI chip demand, a task complicated by the sophisticated requirements of modern AI applications. The company is also focused on diversifying its manufacturing operations beyond Taiwan in response to geopolitical pressures. Wei addressed rumors regarding potential factories in the UAE, denying speculation and clarifying that the firm is expanding its presence in the U.S., Europe, and Japan.
Regulatory compliance remains a crucial aspect of TSMC’s operations, particularly as it navigates complex requirements and relations with China. A recent suspension of shipments to a Chinese chip designer highlights the delicate balance TSMC maintains between its commercial interests and regulatory obligations. While TSMC’s immediate prospects are promising, Wei noted that broader economic factors could pose risks to the semiconductor industry, emphasizing that sustained growth will hinge on advancements in AI technology and the overall health of the global economy.