Taiwan Semiconductor Manufacturing Co (TSMC), the leading producer of chips for artificial intelligence applications, is anticipated to announce strong quarterly earnings despite a 4% drop in its Taipei shares following comments made by Donald Trump regarding Taiwan’s chip business. Trump’s statement caused concern among investors, leading to a decline in TSMC’s American Depository Receipts by 8%. However, industry experts like James Huang believe that while there may be political implications, the market fundamentals, especially in AI, remain strong and unaffected by Trump’s remarks.
As TSMC prepares to report a projected 30% increase in second-quarter profit, it continues to benefit from the rising demand for AI technology, with major companies showing a high level of confidence and investment in the sector. The company, which serves clients like Apple and Nvidia, is expected to post a net profit of T$238.8 billion for the quarter ending June 30, a significant jump from the previous year. Additionally, TSMC’s expansion plans, including investments in new factories in the U.S., demonstrate its commitment to meeting the growing demand for advanced technology solutions.
The ongoing trade tensions and political pressures, exemplified by Trump’s remarks, have cast a shadow over the global tech industry, with concerns about potential restrictions on exports to China affecting companies like ASML. Despite these challenges, TSMC remains a crucial player in the semiconductor market, known as the “sacred mountain protecting the country” in Taiwan due to its vital role in the nation’s economy. The company’s commitment to innovation and expansion underscores its resilience in the face of external uncertainties.