At TSMC’s (TSM) annual shareholder meeting in Hsinchu, Taiwan, Chief Executive C.C. Wei stood at the crossroads of tech ambition and global uncertainty. With towering new fabs rising in Arizona, AI chip orders outpacing the speed of production, and tariff clouds brewing over trade routes, TSMC finds itself both in the driver’s seat of chip creation and on the path of potential geopolitical storms. Yet despite the noise, Wei’s message was clear: AI is the wind in TSMC’s sails, and it’s blowing hard.
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Tariffs Are a Pain, but AI Demands Remain Robust
Wei acknowledged that U.S. tariffs, part of President Trump’s broader trade policy, have created some turbulence. Although TSMC, as an exporter, isn’t directly taxed, higher import costs for U.S. buyers could cool demand. Still, he said the company hasn’t seen customers backing off due to tariff fears. In fact, AI-related orders remain so strong that supply can’t keep up.
“Tariffs do have some impact,” Wei said, “but I can assure you that AI demand has always been very strong and it’s consistently outpacing supply.”
That insatiable demand is helping TSMC power through other headwinds, too. The world’s top chipmaker is in the middle of a massive $165 billion investment to build cutting-edge fabs in the U.S., with government subsidies helping soften the cost gap between American and Taiwanese production. While chips made in Arizona may still end up priced higher, automation is keeping labor costs low, and Washington is listening—TSMC is in active talks with the U.S. Commerce Department to resolve concerns over tariffs on equipment.
Geopolitical Tension Is out of TSM’s Hands
Wei also addressed the rising political tension in the Taiwan Strait, calling it a matter for governments to handle. “If something happens that we don’t want to happen,” he said carefully, “it’s not for TSMC alone to deal with.”
One notable drag on earnings: a strengthening Taiwan dollar, which has cut into gross margins by more than 3 percentage points. Still, the company projects a record year in 2025, driven by booming demand for AI infrastructure from top clients such as Apple (AAPL) and Nvidia (NVDA).
While tariff and geopolitical risks are worth watching, TSMC’s position at the heart of the AI chip supply chain may offer strong support for long-term growth, even in uncertain times.
Is TSM Stock a Buy, Sell, or Hold?
Due to TSMC’s importance to the semiconductor industry, as always, TSMC sports a rating of a Strong Buy, based on eight recent analysts’ ratings. The average TSM stock price target is $219.43, implying a 12.62% upside.
