TSMC sees strong AI chip demand despite US tariffs

The CEO of Taiwan Semiconductor Manufacturing Company (TSMC), C.C. Wei, indicated that United States tariffs have some impact, but demand for AI chips remains strong.

He made these comments during the company’s annual shareholders meeting in Hsinchu, Taiwan, on June 3, 2025.

Wei explained that while tariffs primarily affect importers, they do not directly impact TSMC as an exporter.

He noted that these tariffs could lead to higher prices, which might affect demand.

Despite this, he said that demand for AI continues to exceed supply.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ AI demand is reshaping semiconductor economics despite tariff headwinds

The semiconductor industry is experiencing unprecedented AI-driven growth that’s overwhelming even significant trade barriers.

TSMC reported “extremely robust” demand for AI chips that’s projected to continue for several years, with high-performance computing chip demand expected to triple in 2024 compared to the previous year 1.

This explains why TSMC posted a 35.3% year-over-year revenue increase in Q1 despite tariff uncertainties, with AI accelerator revenue expected to double by 2025 2.

The broader semiconductor market reflects this AI momentum, with industry projections showing growth from $627 billion in 2024 to $697 billion in 2025, driven primarily by data center build-outs and generative AI applications 3.

This growth trajectory suggests a fundamental restructuring of semiconductor demand patterns, with analysts projecting the market could exceed $1 trillion annually by 2030 as AI infrastructure deployment accelerates 4.

2️⃣ Tariff impacts ripple through the ecosystem without disrupting AI momentum

While TSMC’s CEO acknowledges tariffs can lead to higher prices and potentially reduced demand, the complexity of semiconductor supply chains creates indirect rather than direct effects.

The Semiconductor Industry Association previously warned that tariffs could decrease U.S. IT market value by $70 billion over 2019-2020 and reduce GDP growth by 0.9%, demonstrating the broad economic implications of trade barriers 5.