TLDR:
- TSM stock surged 12.3% on Wednesday, breaking a four-day losing streak
- Trump announced a 90-day pause on new tariffs for 75+ countries (excluding China)
- TSMC reported a 41.6% year-on-year revenue increase in Q1 2025
- The company faces a potential $1 billion fine over a U.S. export control investigation
- TSMC has committed to $165 billion in U.S. investments, including multiple chip plants in Arizona
Taiwan Semiconductor Manufacturing Company (TSM) shares staged a comeback on Wednesday, climbing 12.3% to close at $158.75. This jump ended a four-day slide that had erased 17% of the stock’s value following news of potential Trump tariffs.
The chip manufacturer’s stock initially dipped by 2.5% in early trading. The turnaround came after President Donald Trump announced a 90-day pause on new tariffs for more than 75 countries, though China remains excluded.
While semiconductors are currently exempt from Trump’s tariffs, analysts worry about potential “demand destruction” for tech products containing TSMC chips. The foundry produces chips for major tech companies including AMD, Apple, Broadcom, Qualcomm, and Nvidia.
U.S. Expansion Commitments
TSMC has already built a leading-edge semiconductor plant in Arizona as part of a $65 billion investment plan. The company recently announced an additional $100 billion investment to construct three new fabrication plants, two advanced packaging facilities, and a research and development center in the U.S.
President Trump reportedly threatened TSMC with tariffs as high as 100% to push the company to build more plants in America. The White House is moving forward with a lower 10% baseline tariff on most countries while negotiating specific levies with approximately 75 nations.
Taiwan briefly faced a 32% tariff before the White House changed course. Trump has previously stated that Taiwan had taken away U.S. chip business and that he wanted it returned.
Regulatory Challenges
TSMC could face a fine of $1 billion or more to settle a U.S. export control investigation. The issue involves a chip manufactured by TSMC that reportedly ended up inside a Huawei AI processor.
The U.S. Department of Commerce has been investigating TSMC’s work for China-based company Sophgo. According to Reuters, a design company’s TSMC-made chip matched one found in Huawei’s Ascend 910B artificial intelligence processor. China-based Huawei is on a U.S. trade restriction list that limits access to goods made with American technology.
TSMC has not commented on the president’s tariff threats. The chipmaker’s investments in the U.S. will create “many thousands of high-paying jobs,” according to Trump’s statements in March.
Strong Financial Performance
The world’s largest contract chipmaker reported impressive financial results recently. TSMC recorded a 41.6% year-on-year revenue increase in the first quarter of 2025, with total revenue reaching NT$839.25 billion (approximately $23.1 billion).
This positive earnings announcement helped drive the stock’s recovery on Thursday, with shares up nearly 10% when Taiwan’s stock market closed. The company is scheduled to release complete first-quarter earnings next week.
TSMC’s strong performance reflects its dominant position in the semiconductor manufacturing industry. The company produces chips used in Apple’s iPhones and Nvidia’s artificial intelligence hardware, positioning it at the center of the tech industry’s supply chain.
Investors are watching for TSMC’s March sales report, due out Thursday, as the next potential catalyst for stock movement. The report will provide more insight into the company’s performance amid ongoing trade tensions.
The chipmaker’s stock has been volatile in recent months as geopolitical tensions between the U.S. and China continue to impact global trade. Taiwan’s position as a semiconductor manufacturing powerhouse places it at the center of these economic disputes.
Despite these challenges, TSMC’s commitment to expanding U.S. operations may help mitigate some tariff concerns. The company’s investments represent one of the largest foreign direct investments in U.S. history.
Market analysts remain cautious about potential disruptions to the semiconductor supply chain. However, TSMC’s strong Q1 performance suggests the company maintains robust demand for its advanced chip manufacturing capabilities.
For now, investors appear reassured by Trump’s tariff pause and TSMC’s strong revenue growth. The stock’s recovery indicates market confidence in the chipmaker’s ability to navigate complex trade policies while maintaining its technological edge.
