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Investing.com-- TSMC (NYSE:TSM) CEO C.C. Wei said on Tuesday that U.S. trade tariffs were having some impact on the chipmaker, but that outsized artificial intelligence demand was likely to offset trade-related headwinds.
Speaking at the company’s annual shareholders meeting, Wei said that TSMC had not seen any changes in customer trends due to heightened tariff uncertainty, and that the situation was likely to become clearer in the coming months.
“Tariffs do have some impact on TSMC, but not directly. That’s because tariffs are imposed on importers, not exporters. TSMC is an exporter,” Wei said.
“However, tariffs can lead to slightly higher prices, and when prices go up, demand may go down… But I can assure you that AI demand has always been very strong and it’s consistently outpacing supply."
Wei’s comments come after the world’s biggest chipmaker clocked strong first-quarter earnings in April, and flagged a positive outlook for the coming years.
The company is the world’s largest contract chipmaker, and saw a sharp increase in demand over the past two years as increased AI development demanded more advanced chips.
TSMC is a key supplier to AI major Nvidia (NASDAQ:NVDA), as well as several of Wall Street’s tech majors, including Apple Inc (NASDAQ:AAPL). The company has benefited greatly from major tech firms racing to build out more AI infrastructure.
TSMC is also building more chipmaking capacity in the U.S., and has committed $165 billion to the country.
Still, Wei flagged some impact on TSMC from foreign exchange volatility, particularly a sharp depreciation in the dollar and recent strength in the Taiwan dollar. A bulk of TSMC’s revenue is from foreign sales, which leave the company vulnerable to strength in Taiwanese currency.