Taiwan Semiconductor Manufacturing Co TSM stock surged 14% year-to-date, beating the market considerably despite Washington’s tariff policies and semiconductor sanctions cast a shadow over a sustained AI frenzy.

During the same period, the PHLX Semiconductor Index, of which Taiwan Semiconductor is also a constituent, generated 11% returns.

S&P 500 and NASDAQ Composite Indexes generated approximately 5% returns during the period.

Also Read: Taiwan Semiconductor’s Affiliate Fast-Tracks Singapore Plant Spurred By Geopolitics

The key supplier of Nvidia Corp NVDA and Apple Inc AAPL has generated 32% returns in the last three months, compared to 29% for PHLX Semiconductor, 10% for the S&P 500, and 16% for the Nasdaq Composite.

Risks

The Trump administration has also explored plans to end waivers for chipmakers to prevent the export of American technology to China.

Apart from the geopolitical risk, TSMC is also susceptible to currency risk due to high U.S. dollar exposure. The company’s overseas unit, Taiwan Semiconductor Global, faces a currency risk – the Taiwanese dollar is strengthening against the now volatile and weakening U.S. dollar.

TSMC Global Ltd. is preparing to raise $10 billion by issuing new shares to manage currency volatility and maintain capital flexibility. This marks the third such equity move since 2024, and it is the largest to date. The timing coincides with the recent appreciation of the Taiwan dollar.

TSMC’s CEO C. C. Wei informed shareholders this month that the stronger currency has reduced the firm’s operating margin by several percentage points.

Earnings and Market Share

In April, Taiwan Semiconductor reported first-quarter net sales of $25.53 billion (839.25 billion New Taiwanese Dollars), up 41.6% year-over-year, topping the analyst consensus estimate of $23.92 billion. However, the net sales declined 3.4% Q/Q. In U.S. dollar terms, revenue growth was 35.3% Y/Y and down by 5.1% Q/Q.

Taiwan Semiconductor’s AI technology moat helped it expand its quarterly gross margins by 572 bps to 58.8%.

In March, Taiwan Semiconductor chief C.C. Wei announced an additional $100 billion investment in U.S. chipmaking (on top of the $65 billion announced in April 2024).

The chipmaker explored commercializing its advanced 2-nanometer process using gate-all-around (GAA) technology in the second half of 2025.

According to analyst Ming-Chi Kuo, Apple is expected to equip its upcoming iPhone 18 lineup with Taiwan Semiconductor’s advanced 2nm A20 chip.

Intel Corp INTC and Advanced Micro Devices AMD have also selected Taiwan Semiconductor to manufacture chips using the same cutting-edge 2nm process.

Taiwan Semiconductor grew its market share to 67.6% in the first quarter of 2025 from 67.1% in the previous quarter, Focus Taiwan cited Trendforce. Samsung Electronics SSNLF held a 7.7% global market share, down from 8.1% Q/Q.

The top 10 contract chipmakers reported $36.4 billion in sales in the first quarter, down ~5.4% Q/Q. They account for ~97% of the global total, up from 96% in the fourth quarter.

Analyst Opinion

Taiwan Semiconductor has a consensus price forecast of $210.8 based on the ratings of 6 analysts. The high is $270, issued by Needham on July 1, 2025. With an average price forecast of $255 between Needham, Susquehanna, and Barclays, there’s an implied 12.90% upside for Taiwan Semiconductor from these most recent analyst ratings.

Last week, Cathie Wood-led Ark Invest acquired 65,102 shares of Taiwan Semiconductor.

Price Action: TSM stock traded higher by 0.33% at $225.43 premarket at the last check on Wednesday.

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