TSMC, a leading global chip manufacturer based in Taiwan, maintained its positive outlook on Thursday, forecasting a doubling of revenue from artificial intelligence (AI) chips. The company's shares soared 5% in morning trade on the Frankfurt stock exchange following the announcement. Despite the ongoing challenges posed by tighter U.S. export controls on chips to China and the threat of new tariffs, TSMC's CEO, C.C. Wei, expressed confidence in the company's forecasts. "We are mindful of the potential impact from recent tariff announcements, particularly on end market demand," Wei said during an earnings call. "However, we have not observed any change in our customers' behavior so far. As a result, we are sticking to our forecasts." When asked about TSMC's role in tariff negotiations, Wei reiterated that the company remains a private entity and is not involved in such discussions. Last month, TSMC announced an additional $100 billion investment in the United States, a decision that was made in the presence of U.S. President Donald Trump at the White House. Wei also clarified that TSMC is not currently engaged in joint ventures, technology licensing, transfer, or sharing with other companies. Chief Financial Officer Wendell Huang projected that capital expenditure for 2023 would remain within the previously forecast range of $38 billion to $42 billion. For the second quarter, the company expects revenue to reach between $28.4 billion and $29.2 billion, a significant increase from $20.8 billion in the same period last year. Full-year revenue growth is anticipated to be around the midpoint of 20% to 30%. Gary Tan, a portfolio manager at AllSpring Global Investments, noted that TSMC is well-positioned among chip companies to pass on any tariff-related price increases to customers. This strength is reflected in the company's robust financial performance. Net profit for the first quarter, from January to March, rose 60% year-over-year to T$361.6 billion ($11.1 billion), marking the fourth consecutive quarter of double-digit growth. This figure comfortably exceeded the LSEG SmartEstimate of T$354.6 billion. The U.S. government's stricter controls on chip exports to China appear to be having the intended effect. TSMC's revenue from China declined to 7% of total sales, down from 9% in the same period last year. In contrast, North America's contribution to TSMC's revenue increased to 77%, up from 69%. Looking ahead, Wei anticipates that around 30% of the company's capacity for the latest 2-nanometer and more advanced chips will be located in Arizona once the U.S. plants are fully operational. This expansion underscores TSMC's commitment to diversifying its manufacturing capabilities and mitigating geopolitical risks. Despite the positive earnings report, TSMC's shares have faced a downturn this year, mirroring the broader trend in the semiconductor sector. The company's Taipei-listed shares have decreased by approximately 20%, marking the worst start to a year in at least three decades. Foreign investors have sold $8.66 billion worth of TSMC shares this year, a stark contrast to the $2 billion in purchases last year and the $10.4 billion bought in 2023, according to a Goldman Sachs report. Several factors have contributed to this sentiment, including concerns over the high costs associated with AI infrastructure and the emergence of competitive threats. For instance, Chinese startup DeepSeek recently launched cheaper AI models, which could impact demand for more expensive, advanced chips. While TSMC released its earnings report after the market close in Taipei, the positive results had a notable effect on the shares of Japanese tech firms and some European companies. The company's resilience and optimistic outlook are a bright spot in the semiconductor industry, which continues to navigate complex geopolitical and economic landscapes. ($1=32.4770 Taiwan dollars) Reporting by Wen-Yee Lee, Faith Hung, and Ben Blanchard; Additional reporting by Ankur Banerjee in Singapore; Writing by Anne Marie Roantree; Editing by Edwina Gibbs and Clarence Fernandez. Our Standards: The Thomson Reuters Trust Principles.