Taiwan Semiconductor Manufacturing Company (TSMC), the world's leading semiconductor foundry, remains a dominant force in the global supply chain for artificial intelligence (AI) despite geopolitical tensions. In the fourth quarter of 2024, the company achieved record results: Net profit rose by 57 percent to NT$374.7 billion (US$11.4 billion), while revenue increased by 39 percent.

The growing interest in AI chips and a diversified customer base have helped TSMC achieve impressive growth. Stocks of the company, listed in Taipei, rose by 90 percent last year, while the American Depositary Receipts (ADRs) in the United States even increased by 103 percent.

Major customers like Apple and Nvidia contribute significantly to revenue strength, with North America accounting for around 65 percent of total earnings in the second quarter of 2024. Meanwhile, TSMC is investing massively in the US market, including $65 billion in new production facilities in Arizona.

TSMC is not unaffected by the heightened trade restrictions of the USA against China.

These measures could force TSMC to implement stricter compliance measures to ensure that chips do not reach sanctioned companies. Such controls could increase costs and strain business relationships. TSMC is already expecting lower gross margins in the current quarter due to higher operating costs in new factories in the USA and Japan.

In the long term, the Chinese market, which now contributes only about 10 percent to TSMC's total revenue, is likely to lose significance further. By comparison, it was 16 percent in the second quarter of 2023. Meanwhile, North America remains a stable sales market with growing strategic importance.

With Donald Trump's return to the White House, the geopolitical situation for TSMC could become more complex as diplomatic challenges and technology find a closer link. However, thanks to its strong market position, diversified customer base, and technological superiority, TSMC is well-positioned to continue outperforming its competitors.