TSMC: Tariffs Are a Minor Bump—AI Is the Real Prize

On Tuesday, June 3, TSMC (TSM.US) CEO C.C. Wei told shareholders that while U.S. tariffs have had some impact on business, demand for AI remains robust and continues to outstrip supply.

Wei noted that as an exporter, TSMC is not directly targeted by the tariffs, which mainly affect importers. However, the tariffs could still drive up product prices, potentially dampening demand. So far, there has been no sign that customers are changing their purchasing behavior due to tariff-related uncertainty. He expects the situation to become clearer in the coming months.

Wei also said that TSMC has been in communication with the U.S. Department of Commerce regarding tariff concerns, particularly their potential to increase production costs in China. TSMC has invested $165 billion in its operations in China.

In addition, he publicly told former President Donald Trump that the company’s $100 billion investment plan would be difficult to complete within five years, to which Trump reportedly responded with understanding.

Wei pointed out that the recent appreciation of the New Taiwan dollar has reduced TSMC’s gross margin by more than three percentage points, putting pressure on the company’s profitability. He also dismissed rumors of a potential plant in the Middle East, saying the region lacks a solid customer base.