Taiwan Semiconductor Manufacturing Company (TSMC) (NYSE: TSM), the world’s largest contract chipmaker, saw its shares climb over 4% on Tuesday, a significant leap driven by exceptionally strong May revenue figures that far surpassed market expectations.
The surge underscores the continued robust demand for artificial intelligence (AI) chips, with industry giants like Nvidia playing a pivotal role in TSMC’s impressive performance.
TSMC shares had surged 4.47% to an intraday high of $1,050.
May revenue increase
TSMC reported a 39.6% year-on-year surge in May revenue, reaching NT$320.5 billion (approximately $10.7 billion).
The numbers signal a healthier-than-anticipated rebound in the semiconductor industry, largely propelled by the relentless demand for cutting-edge AI accelerators.
This remarkable growth follows a 48% year-on-year increase in April revenue, highlighting a consistent upward trend in the company’s financial performance.
Though the May figures grew from the previous year, they still fell 8% from April’s numbers.
The positive revenue report immediately injected optimism into the market, reassuring investors that TSMC is well-positioned to capitalize on the burgeoning AI wave.
The company’s resilience, even amidst broader economic uncertainties, is a testament to its technological leadership and indispensable role in the global tech supply chain.
Navigating tariff impacts while AI demand stays strong
During the company’s annual shareholders’ meeting on June 3, TSMC CEO C.C. Wei addressed the topic of U.S. tariffs.
Wei clarified that while tariffs do have “some impact,” they are not directly imposed on TSMC as an exporter, but rather on importers.
However, he acknowledged that higher prices resulting from tariffs could potentially weaken overall demand for products that incorporate their chips, thereby indirectly affecting TSMC’s business.
Despite this, Wei emphasized that TSMC has not observed any changes in customer behavior due to tariff uncertainty and expects the situation to become clearer in the coming months.
Crucially, Wei reiterated that AI demand has always been “very strong” and is “consistently outpacing supply.”
This persistent, robust demand for AI chips continues to be the primary driver of TSMC’s growth, effectively mitigating the indirect pressures from tariffs.
The company’s focus remains on providing its customers with sufficient chips, indicating that supply is still catching up with the extraordinary appetite for AI hardware.
TSMC also confirmed ongoing discussions with the U.S. Commerce Department regarding concerns over rising costs related to its significant $165 billion worth of investments in new U.S. factory facilities.
The company maintained its 2025 fiscal year guidance of mid-20 % in the shareholders’ meeting.
A key contributor to TSMC’s outstanding results is the unwavering demand from its major clients, particularly Nvidia.
As the dominant force in AI graphics processing units (GPUs), Nvidia heavily relies on TSMC’s advanced manufacturing processes to produce its high-performance chips, including the coveted H100 and upcoming Blackwell series.
Nvidia’s booming sales of AI chips directly translate into increased orders for TSMC, driving significant revenue growth for the Taiwanese giant.
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