TSMC claims tariffs may have an impact on AI demand, but TSMC believes that the impact is minimal.

The U.S. Tariffs have some impact, but the demand for Artificial Intelligence (AI) is still strong and continues to exceed supply. This was stated by the CEO of Taiwanese Chipmaker TSMC on Tuesday.

The trade policies of U.S. president Donald Trump have caused much uncertainty in the global chip market and TSMC. TSMC is the leading producer of advanced semiconductors, whose customers include Apple.

C.C. Wei said that the tariff uncertainty has not affected the behaviour of customers. The situation could become clearer over the next few months.

"Tariffs have an impact on TSMC but not directly. This is because tariffs are only imposed on importers and not exporters. TSMC is a major exporter. Tariffs may lead to slightly higher costs, but if prices rise, the demand could drop," he added.

If demand falls, TSMC could suffer. "AI demand has been strong for many years and is consistently exceeding supply."

The company, which is the largest contract chipmaker in the world, provided a positive outlook for the coming year based on the robust demand for AI-related applications.

Wei, a sign that the demand is strong, said TSMC has a job to do: "provide our customers with enough chips. We're working very hard on this." "Working hard" means that it is still not enough.

Wei commented on reports in the media that the company was evaluating the building of chip factories in United Arab Emirates. He said they had no plans to build such plants in Middle East. (Reporting and writing by Wen-Yee Lee, Editing by Christian Schmollinger & Edwina Gibbs; Writing by Ben Blanchard)

(source: Reuters)