Explosive AI demand fuels Taiwan chip giant TSMC growth plans, even as US tariff clouds loom. 

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, is forecasting its AI-related revenue to double in 2025. This bullish projection rides on the back of soaring global demand for high-performance chips, even as the company contends with potential US tariffs and a complex geopolitical landscape.

AI Demand Fuels Massive Growth

In 2024, TSMC hit a record revenue of $87 billion, with over $10 billion—roughly 11.5%—coming from AI-related products. With AI rapidly infiltrating sectors from cloud computing to autonomous systems, TSMC expects this figure to double in 2025.

High-performance computing (HPC), including AI workloads, accounted for 52% of TSMC’s total revenue in 2024—the first time it surpassed the halfway mark. The company’s advanced 3nm and 5nm chip technologies have been critical to powering this demand, enabling faster, more efficient AI computation.

Scaling Up with Advanced Packaging

To support this exponential growth, TSMC is doubling down on investments in advanced packaging technologies like chip-on-wafer-on-substrate (CoWoS). These techniques are vital for boosting performance and efficiency in AI chips.

For 2025, the company plans to spend between $38 billion and $42 billion on expanding capacity for leading-edge nodes and packaging infrastructure—an aggressive move to maintain its technological edge.

Trade Tensions Loom

TSMC’s ambitious roadmap isn’t without obstacles. The US government has recently launched investigations into the national security risks of semiconductor imports, hinting at potential tariffs. The proposed levy—starting at 10% and possibly rising to 25% or more—could directly impact Taiwanese firms like TSMC.

To cushion the blow, TSMC is deepening its US footprint. With more than $100 billion committed to building and upgrading facilities in Arizona, the company is working to align with American supply chain priorities while mitigating geopolitical risks.

Strong Start to 2025

Despite trade uncertainties, TSMC delivered a stellar first quarter in 2025. Revenue jumped 42% year-over-year to $25.85 billion, and net profit soared to $11.3 billion—a 60% gain.

The company remains confident in its growth trajectory, maintaining a full-year revenue outlook in the mid-20% range, largely fueled by demand for AI and HPC solutions.

That said, expanding globally comes at a cost. Operating expenses are rising, and profit margins could be temporarily squeezed. TSMC is countering this with supply chain optimization and by tapping into government incentives where available.

Conclusion

TSMC’s bet on AI is bold—and it’s paying off. As AI adoption accelerates, the company is positioning itself as a central player in the next wave of tech innovation. At the same time, it’s managing the real-world complexities of geopolitical risk and trade policy.

For strategic decision-makers and business leaders, TSMC’s current trajectory is a case study in balancing opportunity with uncertainty—and in using long-term vision to ride out short-term turbulence.