"TSMC sits in the crosshairs. The company manufactures 90% of the world's advanced chips from Taiwan, the geographic epicenter of tariff risk. With $3.63 trillion in trailing revenue and 59.4% gross margins, TSMC has enormous profitability to protect. A 25% tariff on Taiwan-manufactured chips hits TSMC's customers (NVIDIA, AMD, Qualcomm, Apple) first, but the pain cascades back to the foundry."
"The company just raised 2026 capital expenditure guidance to $56 billion, signaling confidence in AI demand. CEO C.C. Wei told analysts that AI infrastructure spending would drive 30% revenue growth this year. That confidence now collides with tariff uncertainty. TSMC's Arizona fabs won't save it near-term. The Phoenix facilities are ramping 4nm production, but represent a fraction of total capacity. Most AI chips, NVIDIA's H100s and H200s, AMD's MI300 series, still come from Taiwan."
A 25% tariff targets AI chips, with exemptions still being negotiated. Stock moves showed TSMC up 8%, AMD up 12%, and NVIDIA up 3% after TSMC earnings. Tariff exposure depends on manufacturing location, supply-chain concentration, and revenue mix. TSMC manufactures 90% of advanced chips in Taiwan and faces concentrated geographic risk despite substantial trailing revenue and high gross margins. TSMC raised 2026 capex guidance to $56 billion and forecasted AI-driven revenue growth of about 30%. Arizona fabs provide limited near-term capacity, leaving most AI chips reliant on Taiwan production and subject to tariff disruption.
Read at 24/7 Wall St.
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