The Taiwanese semiconductor giant TSMC announced on Thursday a significant increase in net profits for the initial quarter and predicted strong demand for artificial intelligence technology, even with the threat of U.S. tariffs hanging over this crucial industry.

The Taiwan Semiconductor Manufacturing Company is the globe's premier outsourcer of chip production, which has become essential for the worldwide economy, driving innovations ranging from mobile phones to weaponry.

The demand for chips has surged recently due to the growing popularity of AI technologies; however, concerns have arisen that US President Donald Trump's extensive tariff measures might lead to increased costs for consumers and potentially harm chip manufacturers.

TSMC reported that its net profit for the initial quarter of 2025 increased by 60.3 percent compared to the same period last year, reaching NT$361.56 billion ($11.1 billion).

It surpassed the forecast of NT$346.76 billion, as per a Bloomberg News poll of analysts.

The net revenue for the period jumped approximately 42 percent year-over-year to NT$839.25 billion, surpassing expectations, according to data provided by the firm last week.

The first quarter ended before Trump's so-called "Liberation Day" tariffs on April 2.

The chairperson and CEO of TSMC, C.C. Wei, stated that the company has not observed "any shift in customer behavior" as of yet.

Wei stated that we remain confident about achieving a nearly 20% to 30% growth in our full-year 2025 revenues when measured in US dollars. He also mentioned that the demand related to artificial intelligence is anticipated to stay strong.

"We might get a better picture in the next few months, and we will continue to closely monitor the potential impact to the end market demand and manage our business prudently," Wei said.

Gauge tariff impact

TSMC, serving major clients like Nvidia and Apple, has faced criticism from Trump, who accuses Taiwan of pilfering America’s semiconductor sector.

Hopes were high in Taiwan that TSMC’s decision to invest an extra $100 billion in the U.S. might protect the island from new tariff measures.

Trump still imposed a 32 percent duty on Taiwanese imports as part of his sweeping tariffs on global trade partners -- which he later paused for 90 days -- but it excluded semiconductors.

Currently, Washington is moving ahead with proposals to impose tariffs on semiconductors and semiconductor manufacturing equipment, initiating “national security” investigations within this sector.

Taiwan's Minister of Economic Affairs, Kuo Jyh-huei, stated on Tuesday that the government plans to conduct simulations to assess the potential effects of U.S. tariffs.

Taiwan has already committed to increasing investments in the United States, purchasing additional American energy products, and raising defense expenditures to over three percent of its GDP as a strategy to preemptively address potential tariff measures from the Trump administration.

Additionally, TSMC's future prospects were further obscured by reports indicating their intention to establish a joint venture with Intel to manage the latter's semiconductor fabrication plants.

Wei stated on Thursday that "TSMC is not involved in any discussions with other companies concerning joint ventures, technology licensing, or technology transfers and sharing."