Geopolitical Tensions and AI Demand: The Dual Forces Shaping TSMC's Trajectory

Trump's tariff rhetoric pressures TSMC, but major funds are buying and unabated AI demand provides a strong counterweight to political uncertainty.

The global semiconductor landscape faces renewed political scrutiny, with Taiwan Semiconductor Manufacturing Company (TSMC) positioned directly in the spotlight. Recent comments from former U.S. President Donald Trump have reignited concerns over trade policy, compelling investors to assess the potential impact of rhetoric on the chip giant's fundamental business operations.

Trade Policy Uncertainty Resurfaces

According to a report by the South China Morning Post, Donald Trump recently asserted that Taiwan has "stolen" America's chip business. These remarks followed a 6:3 ruling by the U.S. Supreme Court that struck down emergency tariffs previously instituted by Trump. The former president contended that Taiwanese semiconductor firms, including TSMC, are establishing fabrication plants in states like Arizona and Texas primarily as a strategy to circumvent potential import duties.

This debate is underpinned by a substantial financial commitment from Taiwan. A previously announced investment pledge of $500 billion into the United States was reportedly designed explicitly to pressure Washington into reducing proposed tariffs on technology exports from 20% to 15%. This context reveals the high-stakes nature of the discussion for TSMC, which centers on the future terms governing the flow of critical semiconductors worldwide.

Institutional Investors Maintain Conviction

Despite these geopolitical headwinds, major institutional funds have demonstrated continued, and in some cases increased, confidence in TSMC's equity. Recent portfolio disclosures highlight significant buying activity.

• Explore Capital Management LLC boosted its holdings by 15.9% during the third quarter, accumulating 62,032 shares valued at approximately $17.33 million. This position is now the fund's second-largest, accounting for 10.7% of its total portfolio.
• Premier Fund Managers Ltd increased its stake by 21.0%, bringing its total to 36,300 shares.
• The most dramatic expansion came from Westerkirk Capital Inc., which enlarged its position by a substantial 292.0% to 28,417 shares.

Unabated AI Demand Provides Counterweight

A powerful countervailing force comes from the relentless demand driven by artificial intelligence. TSMC holds the 25th position globally in Sector HQ's "AI Leaderboard" as of February 22, 2026, with a score of 36.8. Supporting this trend are signals from the broader supply chain. Executives from South Korea's SK Group recently emphasized that demand for High Bandwidth Memory (HBM)—a crucial component paired with advanced AI processors—currently exceeds available supply by more than 30%.

The investment thesis for TSMC now appears balanced between two potent dynamics. On one side lies political and trade-related pressure, while on the other, a structurally strong demand tailwind from AI infrastructure build-out continues. Reflecting this equilibrium, the company's shares have remained resilient, trading at €314.50 at Friday's close—a level just shy of its 52-week high.