TSMC's Strong AI Chip Demand Outpaces Tariff and Taiwan Risks

TSMC, the world's top chipmaker, is confident in its AI chip demand despite US tariffs and Taiwan risks. CEO C.C. Wei said AI orders are outpacing production and driving a record year in 2025. TSMC is investing $165 billion in US fabs and addressing tariff concerns with the US Commerce Department. While a strengthening Taiwan dollar and geopolitical tensions are potential drags, TSMC's position in the AI chip supply chain suggests long-term growth potential.

Taiwan Semiconductor Manufacturing Company (TSMC), the world's top chipmaker, is navigating a complex landscape of AI chip demand, U.S. tariffs, and geopolitical tensions. At the company's annual shareholders meeting, CEO C.C. Wei expressed confidence in the strong demand for AI chips, despite challenges posed by U.S. tariffs and a strengthening Taiwan dollar [1].

Wei stated that AI demand has consistently outpaced supply, driving a record year for TSMC in 2025. He noted that while tariffs are not directly impacting TSMC as an exporter, they can lead to higher prices and potentially reduced demand [1]. Wei emphasized that TSMC's business could be affected if demand drops, but assured shareholders that AI demand remains robust and is expected to continue growing [1].

TSMC is investing $165 billion in new chip facilities in the United States, with Wei addressing tariff concerns with the U.S. Commerce Department. He noted that the company is in active communication with the department, highlighting the potential impacts of tariffs on its operations and investments [1].

Wei also dismissed speculation about a potential expansion to the United Arab Emirates, stating that TSMC has no plans for a Middle East facility and that it is not very likely the company would have customers there [1]. This decision was likely influenced by concerns about national security and talent drain from other locations [2].

Despite these challenges, TSMC's position in the AI chip supply chain suggests long-term growth potential. The company's stock has fallen 1% this year but gained more than 25% over the past 12 months, indicating investor confidence in TSMC's ability to navigate these challenges [1].

References:
[1] https://stocktwits.com/news-articles/markets/equity/tsmc-ceo-says-ai-demand-strong-but-trump-s-tariffs-still-a-risk/chkr3sdRbvX
[2] https://www.tomshardware.com/tech-industry/semiconductors/tsmc-quashes-uae-fab-rumors-but-says-ai-demand-remains-fierce-in-the-face-of-tariff-pressures