The world’s leading chipmaker just proved it can weather uncertainty. Taiwan Semiconductor Manufacturing Company (TSMC) reported stronger-than-expected quarterly results, driven by relentless demand for AI processors. Even as geopolitical tensions loom, the company remains confident in its trajectory. Here’s why the tech giant isn’t backing down from its ambitious targets.
TSMC posted first-quarter revenue of NT$839.25 billion, slightly above analyst projections of NT$835.13 billion. Net income surged 60% year-over-year to NT$361.56 billion, showcasing the company’s ability to capitalize on the AI revolution. The high-performance computing segment, which includes AI and 5G applications, saw a 7% quarterly jump, now making up 59% of total sales.
Cutting-edge chip technologies, defined as 7-nanometer and below, contributed 73% of wafer revenue—underscoring TSMC‘s dominance in advanced manufacturing. Smaller nanometer sizes mean more powerful and efficient chips, a key reason clients like Nvidia rely on TSMC.
CEO C.C. Wei acknowledged seasonal dips in smartphone-related demand but emphasized that AI growth more than compensated. Looking ahead, he expects 3-nanometer and 5-nanometer technologies to fuel momentum in the coming months.
Geopolitical Challenges and Strategic Moves
As the backbone of the global semiconductor industry, TSMC supplies critical components for AI leaders. Yet, challenges persist. U.S. trade policies, including potential tariff hikes and stricter export controls, could disrupt operations. Current tariffs on Taiwanese goods stand at 10%, with threats of an increase to 32% if negotiations stall.
Wei acknowledged these risks but noted no immediate shifts in customer orders. Despite uncertainty, TSMC reaffirmed its full-year revenue growth forecast in the mid-20% range, betting on sustained AI expansion.
To mitigate reliance on Taiwan, the company is expanding overseas. A recent pledge to invest an additional $100 billion in U.S. facilities signals a strategic shift. Still, Wei denied rumors of a joint venture with Intel, clarifying that TSMC operates independently.
U.S. Expansion and Market Response
In a notable development, AMD and Nvidia confirmed plans to produce chips at TSMC‘s Arizona plants, marking a milestone for U.S.-based semiconductor manufacturing. Nvidia aims to build significant AI infrastructure domestically over the next four years with TSMC‘s support.
Despite strong fundamentals, TSMC‘s shares dipped slightly, reflecting broader market concerns. Year-to-date, the stock has faced pressure, down over 20%. Yet, with AI demand showing no signs of slowing, the company’s long-term outlook remains solid.