Taiwan Semiconductor Manufacturing Co.’s quarterly revenue rose a larger-than-anticipated 42%, reflecting strengthening demand for AI servers and smartphones before US tariffs kicked in.

That marked TSMC’s fastest pace of growth since 2022. Electronics manufacturers had stockpiled goods in US warehouses in anticipation of potential trade and shipping disruptions.

The main chipmaker for Apple Inc. and Nvidia Corp. reported revenue of NT$839.25 billion ($25.5 billion) in the first three months of 2025. Analysts on average expected roughly NT$830.5 billion. The company reports full quarterly earnings next week.

TSMC’s U.S.-listed shares jumped over 4% in overnight trading.

Its results coincide with growing concerns about how tariffs may disrupt demand for electronics such as iPhones. Over the weekend, Americans rushed to pick up Apple’s marquee device, fearing it may raise prices to cover the additional cost.

In March, TSMC Chief Executive Officer C.C. Wei and President Donald Trump jointly announced an additional $100 billion investment in US chipmaking, boosting the White House’s goal of bringing manufacturing back home. Trump credited rising tariffs for the extra outlay.

More broadly, there are signs that the pace of spending on datacenters and AI chips may be slowing somewhat. Microsoft Corp., for one, has pulled back on projects around the world, suggesting it’s rethinking plans.

Some analysts warned TSMC might have to cut its full-year revenue target for growth in the mid-20% range, reflecting global uncertainty and the potential hit to economies. Its outlook is overshadowed also by Trump’s threats to slap tariffs on semiconductor imports, although it is unclear when or whether that may happen.

Still, TSMC remains the world’s leader in the production of advanced semiconductors used for artificial intelligence and smartphones. That could cushion the impact of tariffs or trade disruptions.

Major tech companies including Alphabet Inc. and Meta Platforms Inc. haven’t revised plans to invest tens of billions of dollars in AI, or talked about a scaleback. Amazon.com Inc. alone is aiming to spend $100 billion on AI this year.

What Bloomberg Intelligence Says

Investors will be focused on a potential downward revision to the full-year sales target and capital plans, reflecting the weaker outlook on global chip demand amid uncertainty following new US tariffs imposed on April 9. Management’s comments on the demand dynamics for leading-edge nodes (N2, N3), especially from key customers Apple and Qualcomm, N7 node recovery trajectory, US fab cost pressures from tariffs, the strategic relationship with Intel, and confirmation of extended CoWoS constraints will also be critical.

- Charles Shum, analyst