Taiwan Semiconductor Manufacturing Co. reported a 40% surge in May revenue to NT$320.5 billion ($10.7 billion), driven by companies stockpiling chips amid rising trade uncertainties. The strong performance from the world’s leading contract chipmaker—which produces semiconductors for Nvidia and Apple—signals continued resilience in AI-driven demand despite broader geopolitical tensions affecting the tech supply chain.
What you should know: TSMC’s May revenue growth slightly decelerated from April’s 48% increase but still exceeded analyst expectations for the quarter.
• The May figure represents an 8.3% month-over-month decline from April, suggesting some normalization after the previous month’s exceptional performance.
• Analysts on average expect a 39% increase in TSMC’s second-quarter sales, indicating the chipmaker remains on track to meet quarterly projections.
Why this matters: The revenue surge reflects how companies are proactively building chip inventories as trade tensions create supply chain uncertainty.
• TSMC’s performance serves as a key barometer for global semiconductor demand, particularly in AI applications where Nvidia’s chips manufactured by TSMC are essential.
• The stockpiling behavior indicates businesses are prioritizing supply chain security over just-in-time inventory management, potentially reshaping procurement strategies across the tech industry.
The big picture: Despite month-over-month softening, TSMC’s sustained growth demonstrates the semiconductor industry’s underlying strength amid geopolitical headwinds.
• The Hsinchu-based company continues to benefit from its dominant position as the primary manufacturer for leading AI chip designers.
• Strong revenue performance suggests that AI demand remains robust enough to drive significant inventory builds even as companies navigate trade policy uncertainties.
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