TSMC CEO Admits Trump Tariffs Have 'Some Impact' On Chipmaker But Demand 'Consistently Outpacing' Supply Thanks To AI

On Tuesday, Taiwan Semiconductor Manufacturing Co. TSM CEO CC Wei said that while U.S. tariffs are creating some headwinds, robust demand for AI chips continues to exceed the company's supply capabilities.

What Happened: Speaking at TSMC's annual shareholder meeting in Hsinchu, Taiwan, Wei acknowledged that the tariffs imposed under President Donald Trump's trade policies are having an indirect impact, reported Reuters.

"Tariffs do have some impact on TSMC, but not directly. That's because tariffs are imposed on importers, not exporters," he said, adding that TSMC is an exporter.

"However, tariffs can lead to slightly higher prices and when prices go up, demand may go down."

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Despite this, Wei highlighted that demand for AI-related chips remains exceptionally strong. "If demand drops, TSMC’s business could be affected. But I can assure you that AI demand has always been very strong and it’s consistently outpacing supply," he stated.

Wei also denied reports that TSMC plans to build chip factories in the UAE and reaffirmed compliance with U.S. and Taiwanese regulations regarding export controls, particularly after halting shipments to China's Sophgo.

Why It's Important: Last month, Taiwan's Minister of Economic Affairs, JW Kuo, stated that the U.S. tariffs are not a concern for Taiwanese manufacturers. He underscored America’s reliance on Taiwan to strengthen its microchip manufacturing capabilities.

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Kuo also predicted that Samsung Electronics Co. SSNLF is likely to be the most affected by the tariffs, citing the company's limited capacity in advanced semiconductor production.

In April, Trump warned that tariffs of up to 100% could be imposed on TSMC if the chipmaker failed to establish manufacturing facilities in the U.S.

Price Action: TSMC shares rose 0.79% on Monday and gained an additional 0.24% in after-hours trading, closing at $195.30. Despite the recent gains, the stock is still down 3.34% year-to-date, according to Benzinga Pro.

Benzinga’s Edge Stock Rankings indicate that TSMC exhibits a positive price trend over the short, medium and long term. You can find more in-depth metrics here.

Photo Courtesy: Shutterstock/Jack Hong

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.