Summarize this content to 2000 words in 6 paragraphs in Arabic Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Taiwan Semiconductor Manufacturing Company’s position at the heart of the global artificial intelligence supply chain continues to pay off. While intensifying geopolitical tensions pose risks to the world’s chipmakers, TSMC’s dominance leaves it well-placed to weather potential disruptions.For evidence of TSMC’s strengths, look no further than the world’s largest contract chipmaker’s record-beating fourth-quarter results. Rising demand for AI chips and its growing client base drove net profit to NT$374.7bn ($11.4bn) in the December quarter, up 57 per cent on a 39 per cent gain in revenue. Share prices reflect the continuing growth. TSMC’s Taipei-listed shares are up 90 per cent in the past year. There is also growing global interest in the stock, with TSMC’s American depositary receipts up 103 per cent during the same period. Granted, TSMC’s position also makes it vulnerable to rising geopolitical risks. The US has been ramping up restrictions on chip technology exports to China: it added 27 Chinese and Singaporean entities to the US commerce department’s entity list this week. The latest change also widens the list of affected chips. There are now tighter restrictions on certain types of memory chips that are a critical part of AI chips.This means TSMC may need to implement compliance measures to verify that chips are not being diverted to restricted entities. Such controls could inflate costs and complicate relationships with some clients. The chipmaker already expects gross margins in the current quarter to come under pressure, due to higher costs at its new fabrication plants in the US and Japan.Longer term, TSMC’s sales from the Chinese market could take a hit under the weight of tightening US restrictions. Even so, the impact on group revenue and outlook is likely to be limited. TSMC’s revenue from China has been declining in recent years anyway, with analysts estimating that the market now accounts for only about a tenth of the group total. This is down from 16 per cent in the second quarter of last year.The US, on the other hand, remains a significant market for TSMC. Apple and Nvidia are some of its biggest clients. North America accounted for 65 per cent of TSMC’s total net revenue in the second quarter of last year. It has invested heavily in the US, including $65bn in facilities in Arizona.Donald Trump’s return to the US presidency could make geopolitical diplomacy as important to TSMC’s future as its technological capabilities. But given its current growth rate and strong client base, it should continue outperforming its [email protected]
