Taiwan Semiconductor (TSMC) defies tariffs as the U.S. pushes to rewrite the chip map
Shares of Taiwan Semiconductor Manufacturing Company (TSMC) are on track for annual gains of roughly 50%, capping a rocky year for chipmakers on a strong note despite Trump's tariffs.
In early December, Taiwan pushed for a reduction in U.S. export tariffs to 15% from the current 20%. In exchange, Taipei floated what officials described as its “Taiwan model” of technology-cluster development for U.S. companies.
That offer, however, may represent only one element in a broader and more demanding negotiation.
As British-American geopolitical analyst James Wood recently argued, Washington is seeking to significantly reduce its reliance on Taiwan by relocating key portions of the semiconductor supply chain to U.S. soil.
The claim followed remarks by U.S. Commerce Secretary Howard Lutnick, who spoke publicly about roughly $300 billion in cumulative semiconductor investment tied to U.S. industrial policy, though those figures encompass commitments from multiple global companies, not TSMC alone.
The analyst also pointed to TSMC’s $100 billion U.S. expansion as evidence of mounting pressure on Taiwanese industry. While some critics have characterized the move as “forced,” TSMC has consistently described it as a strategic investment aligned with long-term supply-chain resilience.
That investment builds on more than $65 billion TSMC previously committed under the CHIPS and Science Act during the Biden administration.
There’s a clear reason Washington remains focused on TSMC, and why the company’s stock has so far appeared resilient in the face of geopolitical uncertainty.
TSMC: At the center of global supply chains
As the world’s most advanced contract chipmaker, Taiwan Semiconductor sits at the heart of global supply chains, powering everything from artificial intelligence to advanced defense systems.
For now, markets appear to be betting that the company’s technological edge outweighs mounting geopolitical risk.
As Politico reported during the height of trade-war tensions earlier this year, TSMC produces close to 90% of the world’s most advanced logic chips, serving major customers such as Nvidia and Apple.
That dominance gives the company, and by extension Taiwan, outsized influence in the global technology ecosystem.
As a result, while the Trump administration may adopt a tough public posture toward Taipei, TSMC remains a critical linchpin that Washington cannot easily sideline.
Financially, the company has continued to post solid growth through 2025, driven largely by surging demand tied to artificial intelligence.
In its third-quarter earnings report, TSMC delivered better-than-expected revenue and profit, extending a run of quarterly gains and reinforcing investor confidence in its long-term outlook.
Looking ahead, the company forecast continued momentum into the fourth quarter, citing strong customer demand for advanced chips used in AI applications.
“Recent developments in the AI market continue to be very positive,” TSMC CEO C. C. Wei said during the earnings call. “As a result, our conviction in the AI megatrend is strengthening.”