The U.S. tariffs put pressure on Taiwan Semiconductor, AI demand "continues to be strong beyond supply"

According to Zhitong Finance APP, Taiwan Semiconductor Manufacturing Company (TSMC.US) stated on Tuesday that U.S. tariffs have had some impact on the company and that discussions have been held with the Trump administration, but demand for artificial intelligence (AI) remains strong and continues to exceed supply. President Trump's trade policies have created significant uncertainty for the global chip industry and TSMC. TSMC is the top producer of the world's most advanced semiconductors, with clients including Apple (AAPL.US) and Nvidia (NVDA.US). TSMC CEO C.C. Wei stated at the company's annual shareholder meeting held in Hsinchu, a city in northern Taiwan, that due to the uncertainty surrounding tariffs, the company has not yet seen any changes in customer behavior, and the situation may become clearer in the coming months. He said, "Tariffs do have some impact on TSMC, but not directly. This is because tariffs are aimed at importers, not exporters. TSMC is an exporter. However, tariffs may lead to a slight increase in prices, and when prices rise, demand may decrease." "If demand decreases, TSMC's business may be affected. But I can assure you that AI demand has been very strong and continues to exceed supply." In April of this year, the world's largest chip foundry provided an optimistic outlook on the strong demand for AI applications this year. C.C. Wei stated that TSMC has been negotiating with the U.S. Department of Commerce regarding tariff issues and had previously expressed concerns that tariffs could increase its production costs in the U.S. TSMC is investing $165 billion in the U.S. to build new factories, as some equipment purchased from U.S. suppliers is manufactured in Asia. He added, "The U.S. Department of Commerce said this is open for discussion, but how long it will take is unclear," and "the key is that we are actively communicating because only through understanding can they realize the consequences." C.C. Wei mentioned that he had told Trump that the additional $100 billion investment announced alongside the president in March would be difficult to complete within five years. "He said, 'Mr. Wei, do your best, and that's enough.'" When asked about media reports that the company has been considering establishing a chip factory in the United Arab Emirates, C.C. Wei stated that TSMC has no plans to build such a factory in the Middle East, as it is "unlikely" to have customers there. In Taiwan, TSMC's profit margins are currently under pressure from the recent appreciation of the New Taiwan Dollar, with C.C. Wei stating that this has caused its gross margin to decline by more than 3 percentage points