Despite the threat of US tariffs on the vital industry, Taiwanese chipmaker TSMC announced a sharp increase in net profit for the first quarter and predicted strong demand for AI technology.
Sales were driven by TSMC's high-performance computing segment, which includes 5G and artificial intelligence applications. This division accounted for 59 percent of overall revenue in the quarter, up seven percent from the previous one.
According to the business, 73 percent of overall wafer sales came from advanced technologies, which are defined as those that are 7 nanometers or smaller.
Smaller nanoscale sizes indicate more compact transistor designs in semiconductor technology, which result in more processing power and efficiency.
TSMC, the biggest contract chip manufacturer in the world, has continuously profited from the AI boom by manufacturing cutting-edge processors for customers like American chip designer Nvidia.
However, the trade policy of U.S. President Donald Trump, who has imposed harsher export controls on TSMC clients Nvidia and AMD and wide trade taxes on Taiwan, might pose challenges for the company.
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Regarding tariffs, the Trump administration has imposed a 10 percent general tax on Taiwan, which could increase to 32 percent once the 90-day suspension of the President's "reciprocal tariffs" expires unless an agreement is reached with the United States.