These tariffs, which keep getting removed and reapplied, are wreaking havoc across the globe. Stocks are fluctuating, investors are pulling back and no one is sure what the long-term effects are going to entail. Some companies have already started to increase the prices of their products to combat the effects of these tariffs. For example the OnePlus Watch 3 is more expensive in the U.S. now compared to other regions.
However TSMC, perhaps a little naively, believes that its business will remain largely unaffected. The company still expects a growth of over 20 percent this year as well as AI revenue to double. Demand for chips to scale AI models is one of the major factors that has boosted TSMC’s confidence for 2025.
Furthermore TSMC is also seeing an increase in business in another manner where it initially did not expect much growth.
When TSMC first started opening plants in the U.S. it did not expect to receive much business there as ordering from Taiwan still remained more cost-effective for companies. However, now that tariffs have made everything so much more volatile, TSMC is seeing a drastic increase in orders placed at its U.S. factories.
As such TSMC has raised prices for its Stateside plants to the extent where it will now actually enjoy a healthy profit. Meanwhile companies like Apple and Nvidia have no choice but to pay up as continuing to order from outside the country may land them in trouble down the line.
Companies around the world are revising their outlook for 2025 and global trade is expected to decline due to the effects of tariffs. Analysts and experts in the field are also saying that TSMC’s confidence may be a bit misplaced and that the company may suffer the same effects as everyone else.
Perhaps TSMC simply doesn’t want to spook investors or perhaps it really does command enough influence to storm through the global trade decline. I suppose we’ll know sooner rather than later.
