Impact of tariffs noted by TSMC, yet demand for AI technology remains strong
In the face of US tariffs, Taiwan Semiconductor Manufacturing Company (TSMC) has cited some impact on their business, yet the demand for artificial intelligence (AI) remains robust and continues to exceed supply.
The trade policies of President Donald Trump have cast a shadow of uncertainty over the global chip industry, including TSMC—the world's leading producer of advanced semiconductors, serving clients like Apple and Nvidia. At TSMC's annual shareholders meeting in Hsinchu, Taiwan, CEO C. C. Wei addressed the tariff concerns, stating that, "Tariffs do have some impact on TSMC, but they don't hit us directly."
He further elaborated, " tariffs can lead to slightly higher prices, and when prices go up, demand may go down. But if demand drops, TSMC's business could be affected." However, Wei was quick to reassure shareholders, asserting, "AI demand has always been very strong and it's consistently outpacing supply."
TSMC has reserved $165 billion for expanding its chip production capacities in the US, demonstrating a proactive approach to combat potential tariff implications by bolstering its presence in the US market.
The company's AI chip demand stems from significant investment by major tech firms such as Apple and Nvidia in AI infrastructure development. Despite tariff uncertainties, TSMC reports no major changes in customer behavior, with the situation expected to clarify in the coming months. However, the company has communicated potential consequences if US tariffs target Taiwanese semiconductors, posing a threat to TSMC's investment in Arizona.
In navigating through tariff-related challenges, TSMC is prioritizing strategic adaptation to capitalize on the booming demand for AI chips and secure its position as a global chip industry leader.
TSMC's focus on bolstering technology, particularly in AI, remains unwavering despite tariff uncertainties, as indicated by the CEO's assertion that AI demand consistently outpaces supply. Moreover, the robust business of AI, fueled by significant investments from tech giants like Apple and Nvidia, serves as a potential buffer for TSMC's trade concerns.
