TSMC's AI Chip Dominance Amid Geopolitical Risks: Navigating Demand and Regulations

Taiwan Semiconductor Manufacturing Company, with stock symbol TSM, has seen significant recent developments. As of February 5, 2025, the stock price climbed to two hundred eight dollars and fifty-seven cents, with a trading volume of nine million eight hundred twenty-nine thousand three hundred thirty-two shares. This follows a previous day's trading volume of ten million eight hundred eighty-eight thousand four hundred sixty-one shares, indicating a slight decrease in trading activity.Recent news highlights TSMC's strong performance, driven by demand for AI technology. The company reported a thirty-three point nine percent rise in net sales for 2024, exceeding its revenue forecast. This growth is attributed to the increasing demand for AI chips, a sector where TSMC holds a significant market share[1].In terms of analyst updates, the consensus price target for TSM is two hundred three dollars and eighty cents, based on the ratings of six analysts. The highest price target is two hundred fifty-five dollars, issued by Barclays on January 17, 2025. This suggests a potential upside of seventeen point seventy-two percent from the current price[3].Additionally, TSMC has been in the news due to geopolitical tensions and supply chain risks. The US government has ordered TSMC to halt shipments of advanced chips to Chinese customers, effective immediately, targeting chips used in AI applications. This move follows the discovery of a TSMC chip in a Huawei AI processor, potentially violating export controls[2].The company is also investing heavily in new factories in the US state of Arizona, with a sixty-five billion dollar investment plan. This includes a six point six billion dollar grant from the US government to diversify chip manufacturing geographically[2].Overall, TSMC's stock performance is expected to continue its upward trajectory, driven by strong demand for AI chips and strategic investments. However, geopolitical tensions and regulatory challenges may impact the company's operations and stock price in the short term.