TSMC Says US Tariffs Have Some Affect However AI Demand Sturdy

Taiwan’s TSMC mentioned on Tuesday that US tariffs have been having some influence on the corporate and had been mentioned with Washington, however demand for synthetic intelligence (AI) stays sturdy and continues to outpace provide.

US President Donald Trump’s commerce insurance policies have created a lot uncertainty for the worldwide chip trade and TSMC, the highest producer of the world’s most superior semiconductors whose clients embrace Apple and Nvidia.

Chief Govt C.C. Wei, talking at TSMC’s annual shareholders assembly within the northern Taiwanese metropolis of Hsinchu, mentioned the corporate had not seen any modifications in buyer behaviour attributable to tariff uncertainty and the state of affairs may develop into clearer in coming months.

“Tariffs do have some influence on TSMC, however in a roundabout way. That is as a result of tariffs are imposed on importers, not exporters. TSMC is an exporter. Nonetheless, tariffs can result in barely greater costs, and when costs go up, demand might go down,” he mentioned.

“If demand drops, TSMC’s enterprise could possibly be affected. However I can guarantee you that AI demand has at all times been very sturdy and it is persistently outpacing provide.”

In April, the corporate, the world’s largest contract chipmaker, gave a bullish outlook for the yr on strong demand for AI purposes.

Wei mentioned TSMC had been speaking to the US Division of Commerce about tariffs, expressing concern early on that the levies might enhance manufacturing prices within the nation the place it’s investing $165 billion (roughly Rs. 14,10,082 crore) to construct new factories, as some gear bought from US suppliers is made in Asia.

“The US commerce division mentioned that is open for dialogue, however how lengthy that can take stays unclear,” he added. “The true level is that we’re in lively communication, as a result of solely by way of understanding can they realise the implications.”

Wei mentioned he had informed Trump the additional $100 billion (roughly Rs. 8,54,595 crore) funding, which he introduced standing subsequent to the president in March, could be troublesome to finish inside 5 years.

“He mentioned, ‘Mr Wei, do your greatest, that is adequate.'”

Requested about media studies that the corporate had been taking a look at constructing chip factories within the United Arab Emirates, Wei mentioned TSMC had no plans for any such crops within the Center East as a result of it was “not very doubtless” they’d have clients there.

Domestically, TSMC’s margins are being pressured by the current appreciation of the Taiwan greenback, which Wei mentioned had decreased its gross margin by greater than three share factors.

TSMC additionally faces broader political danger as China steps up army strain on democratically and individually ruled Taiwan, which Beijing views as “sacred” Chinese language territory.

“If one thing occurs that we do not need to occur, it is a matter for governments, not for TSMC alone,” Wei mentioned, responding to a query a few potential disaster within the Taiwan Strait.

© Thomson Reuters 2025

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