SINGAPORE, April 17 – Taiwan Semiconductor Manufacturing Co (TSMC) lifted investor sentiment across Asian and European chip stocks on Thursday by issuing a positive forecast, helping ease nerves after bleak warnings from Nvidia and ASML had shaken the market. TSMC, a key supplier for Apple and Nvidia, reported better-than-expected quarterly earnings and reaffirmed its full-year targets for both revenue and capital expenditure. The upbeat outlook came after markets closed in Taiwan, pushing up share prices of tech companies in Japan and Europe. TSMC’s Frankfurt-listed shares rose 5.5% in early trading.

A day earlier, chip stocks took a hit after Nvidia warned of a $5.5 billion loss due to new U.S. export restrictions on its AI chips for China, and ASML expressed concerns over its business outlook. Despite potential risks from U.S. tariffs, TSMC executives said they had not observed any shift in customer behavior and expected strong demand for artificial intelligence to continue driving business growth. As the world’s top contract chipmaker, TSMC plays a critical role in producing advanced AI chips.

Gary Tan of Allspring Global Investments said TSMC was well-positioned to pass on price increases through the supply chain. Although his fund holds TSMC shares, it remains underweight on Taiwan. While TSMC’s outlook offers some relief for chip investors, uncertainties in the sector persist as earnings season unfolds. Mark Hackett of Nationwide noted that company executives might use tariff-related uncertainty as a reason to withhold future guidance.

Concerns over tariffs have already impacted TSMC’s Taipei-listed shares, which have fallen over 20% in 2025 — the worst start to a year in three decades. Its U.S.-listed shares are down 23%. Goldman Sachs reported that foreign investors have sold $8.66 billion worth of TSMC shares this year, following net purchases of $2 billion in 2024 and $10.4 billion in 2023.

Taiwan-related Risks: The broader selloff in TSMC and other Taiwanese stocks highlights investor unease as they respond to unpredictable U.S. trade policy under President Trump. Taiwan was previously set to face a 32% tariff, which was paused to allow for bilateral talks. The first direct discussions between Taiwan and the U.S. on tariffs took place last Friday.

TSMC, which recently committed an additional $100 billion to expand its operations in the U.S., is pivotal to the American chip ecosystem. By relocating more production to U.S. soil, the company could help reduce supply chain vulnerabilities for clients such as Qualcomm and AMD. Sam Konrad of Jupiter Asset Management noted that geopolitical instability surrounding Taiwan poses significant risks to U.S. tech companies, yet those risks appear to be more reflected in Taiwanese stock valuations than in their American counterparts.

Disclaimer: This image is taken from Reuters.