TAIPEI – Taiwan Semiconductor Manufacturing Company (TSMC) reported a 39% increase in revenue for the first two months of the year, reflecting strong demand for Nvidia chips that are essential for artificial intelligence (AI) development. The world’s largest chipmaker recorded a combined revenue of NT$553.3 billion (approximately S$22.4 billion), marking an acceleration from the 34% growth seen throughout 2024. Analysts expect growth of around 41% for the current quarter.
As the primary manufacturer of AI chips globally, TSMC’s sales serve as a key indicator for the industry. There is ongoing debate on Wall Street and in Silicon Valley regarding the sustainability of the AI boom that has propelled Nvidia to become the most valuable company in the world, especially in light of China’s DeepSeek adopting a more conservative approach.
Last week, Broadcom joined the ranks of major tech companies reassuring investors that spending on AI computing remains robust. Prior to this, Taiwanese leader Hon Hai Precision Industry reported a 25% revenue increase in the first two months of 2025, also an improvement over 2024. One significant uncertainty facing TSMC in 2025 is the possibility of U.S. President Donald Trump imposing tariffs on chip imports. TSMC may have preemptively stockpiled inventory in anticipation of such a move.
Recently, TSMC’s CEO met with Trump at the White House to announce a planned US$100 billion (S$133.14 billion) investment in U.S. manufacturing, one of the largest commitments by a foreign company. This investment is viewed as a strategy to mitigate the risk of tariffs, though it has raised concerns about the potential shift of advanced technology away from Taiwan. Bloomberg Intelligence credit analyst Cecilia Chan noted that the US$100 billion investment would not affect TSMC’s credit ratings, given its record-high net cash position of US$44 billion. However, she cautioned that it could prolong the break-even period and further impact profit margins if funding from the Chips Act were to be reduced, a measure Trump has advocated for.
