TSMC Sees Minimal Tariff Impact as Strong AI Demand Drives Growth

According to the CEO of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), US tariffs are having a noticeable effect, but interest in artificial intelligence (AI) remains strong and is still outpacing the available supply.

A close-up of a complex network of integrated circuits used in logic semiconductors.

The global chip market has been clouded by uncertainty due to President Trump’s trade policies, which have impacted major players like TSMC. The company, known for supplying advanced chips to firms such as Apple and Nvidia, appears optimistic about AI’s future.

In a sign of that confidence, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is reportedly considering setting up a high-tech manufacturing plant in the United Arab Emirates. Talks have taken place with officials from Trump’s administration, and any move forward would likely depend on US government approval.

Meanwhile, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has already committed $165 billion to its Phoenix, Arizona project, which includes not just chip production but also research and packaging operations.

During the company’s annual shareholders meeting in Hsinchu, northern Taiwan, C.C. Wei stated that so far, there hasn’t been any noticeable shift in customer behavior despite the ongoing uncertainty around tariffs. He added that the situation might become more transparent in the next few months. He further stated the following:

“Tariffs do have some impact on TSMC, but not directly. That’s because tariffs are imposed on importers, not exporters. TSMC is an exporter. However, tariffs can lead to slightly higher prices, and when prices go up, demand may go down. If demand drops, TSMC’s business could be affected. But I can assure you that AI demand has always been very strong and it’s consistently outpacing supply.”

TSM has surged by nearly 26% in the past 12 months.

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