Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, yesterday announced better-than-expected first quarter results, with net income increasing 60.3% over the same period a year ago. The company’s net revenue for the March quarter came in at NT$839.25 billion, beating estimates of NT$835.13 billion. This impressive growth comes as TSMC navigates challenges posed by U.S. trade policies under former President Donald Trump, which have raised tariffs on Taiwanese goods.
This is a significant strategic move by TSMC to diversify its supply chains. They are pumping an extra $100 billion into the United States, mostly to reduce risks from trade tensions. This new investment builds on the $65 billion investment announced earlier this winter. That money is specifically set aside to construct three new plants around the country. The bulk of TSMC’s manufacturing operations still occur in Taiwan. These overseas facilities signal a significant shift in the company’s approach to global production.
With TSMC rapidly expanding stateside and a promising new U.S. They’re going to make processor chips for AMD at one of their new factories in Arizona. What a historic victory this is! For the first time, AMD’s chips will be baked on American soil. Nvidia has already commenced production of its Blackwell chips at TSMC’s Arizona plants, further solidifying the company’s role in the semiconductor market.
Even with these significant breakthroughs, TSMC has unprecedented headwinds over the rapidly changing trade policies of the Trump administration. If Trump imposed broad trade tariffs on Taiwan, for example, they could increase by as much as 32%. This jump would only occur after a 90-day temporary halt. Added to this, more pull on TSMC. It has huge implications for its clients, unexpected major players to this recent geopolitical battle such as Nvidia and AMD, who are now subject to tighter export controls.
As for a stock market response, TSMC’s Taiwan-listed shares were down slightly, about 0.4% lower. While the company’s robust financial performance suggests resilience, the looming threat of increased tariffs raises concerns about future growth potential.