Taiwan Semiconductor Manufacturing Company on Thursday beat profit expectations for the first quarter, thanks to a continued surge in demand for AI chips.

Here are TSMC’s first-quarter results versus LSEG consensus estimates:

• Revenue: $839.25 billion New Taiwan dollars, vs. NT$835.13 billion expected
• Net income: NT$361.56 billion, vs. NT$354.14 billion 

TSMC’s reported net income increased 60.3% from a year ago to NT$361.56 billion, while net revenue in the March quarter rose 41.6% from a year earlier to NT$839.25 billion.

The world’s largest contract chip manufacturer has benefited from the AI boom as it produces advanced processors for clients such American chip designer Nvidia.

However, the company faces headwinds from the trade policy of U.S. President Donald Trump, who has placed broad trade tariffs on Taiwan and stricter export controls on TSMC clients Nvidia and AMD.

Semiconductor export controls could also be expanded next month under the “AI diffusion rules” first proposed by the Biden administration, further restricting the sales of chipmakers that use TSMC foundries.

Taiwan currently faces a blanket 10% tariff from the Trump administration and that could rise to 32% after the President’s 90-day pause of his “reciprocal tariffs” ends unless it reaches a deal with the U.S.

As part of efforts to diversify its supply chains, TSMC has been investing billions in overseas facilities, though the lion’s share of its manufacturing remains in Taiwan.

In an apparent response to Trump’s trade policy, TSMC last month announced plans to invest an additional $100 billion in the U.S. on top of the $65 billion it has committed to three plants in the U.S.

On Monday, AMD said it would soon manufacture processor chips at one of the new Arizona-based TSMC facilities, marking the first time that its chips will be manufactured in the U.S.

The same day, Nvidia announced that it has already started production of its Blackwell chips at TSMC’s Arizona plants. It plans to produce up to half a trillion dollars of AI infrastructure in the U.S. over the next four years through partners, including TSMC.

Taiwan-listed shares of TSMC were down about 0.4%. Shares have lost about 20% so far this year.

A day after Nvidia revealed it would incur $5.5 billion in costs related to canceled orders for the H20 chip, which the government said this week requires a license to export to China, the company said it abides by rules on where it can sell its artificial intelligence processors.

“The U.S. government instructs American businesses on what they can sell and where — we follow the government’s directions to the letter,” an Nvidia representative said in a statement.

Nvidia said the statement was in response to a House Select Committee focused on national security threats from China, which opened an investigation into Nvidia’s sales on Wednesday. The H20 was introduced by Nvidia after the Biden administration restricted AI chip exports in 2022. It’s a slowed-down version intended to comply with U.S. export controls.

Nvidia’s brief comment is an indication of how the company is going to defend its business in Washington, D.C., as its technology draws increased scrutiny related to national defense and security. The company’s stock price tumbled almost 7% on Wednesday.

Nvidia’s chips have the vast majority of the market for AI applications, and some were used by China’s DeepSeek to build R1, which upended markets in January.

On Wednesday, the chipmaker touted the taxes it paid, its U.S.-based workforce, and its role as a technology leader.

The company’s exports even help the U.S. fix its trade deficit, the statement said, directly addressing President Trump’s stated reason for introducing tariffs earlier this month.

“NVIDIA protects and enhances national security by creating U.S. jobs and infrastructure, promoting U.S. technology leadership, bringing billions of dollars of tax revenue to the U.S. treasury, and alleviating the massive U.S. trade deficit,” according to the statement.

One challenge for Nvidia is that the H20 was legal for export to China until last week, under previous Biden administration rules. But the House Select Committee said on Wednesday the sale of H20 chips for the past year was effectively a “loophole.”

“The technology industry supports America when it exports to well-known companies worldwide – if the government felt otherwise, it would instruct us,” Nvidia said in its statement.

The government is also investigating whether shipments of restricted chips to China went through Singapore, Nvidia’s second-largest market by billing address with just under $24 billion in sales in the company’s past fiscal year, according to filings.

Nvidia clarified on Wednesday that its Singapore revenue indicates sales with a billing address in the country, often for subsidiaries of U.S. customers.

“The associated products are shipped to other locations, including the United States and Taiwan, not to China,” Nvidia said.

In addition to Chinese export controls and the congressional investigation, Nvidia also faces additional restrictions on what it can export starting next month, under “AI diffusion rules” first proposed by the Biden administration.

WATCH: Nvidia’s $5.5 billion hit may prove the AI digestion phase is here

A week ago, President Donald Trump signed an executive order targeting former Cybersecurity and Infrastructure Security Agency Chief Chris Krebs, and calling on the government to suspend the security clearances of any entities with whom he’s associated. The order specifically named SentinelOne, Krebs’ employer.

On Wednesday, Krebs announced his resignation from SentinelOne, a cybersecurity company with a $5.6 billion market cap. While Krebs said the choice was his alone, his swift departure is the latest example of the effect Trump is having on the private sector when it comes to pressuring people and institutions that he personally dislikes.

Krebs had served as SentinelOne’s chief intelligence and public policy officer since late 2023, when the company acquired his consulting firm.

“For those who know me, you know I don’t shy away from tough fights,” Krebs wrote in an email to SentinelOne staffers that the company posted on its website. “But I also know this is one I need to take on fully — outside of SentinelOne. This will require my complete focus and energy. It’s a fight for democracy, for freedom of speech, and for the rule of law. I’m prepared to give it everything I’ve got.”

Krebs served as the first CISA director from 2018 until he was fired in November 2020 after declaring that the presidential election, which Democrat Joe Biden won, was “the most secure in American history.” CISA is part of the Department of Homeland Security.

In his executive order on April 9, which took the extraordinary approach of going after a specific individual, Trump called Krebs a “bad-faith actor who weaponized and abused his Government authority.”

“Krebs’ misconduct involved the censorship of disfavored speech implicating the 2020 election and COVID-19 pandemic,” the order said. “Krebs, through CISA, falsely and baselessly denied that the 2020 election was rigged and stolen, including by inappropriately and categorically dismissing widespread election malfeasance and serious vulnerabilities with voting machines.”

Trump directed the attorney general, director of national intelligence and “all other relevant agencies” to suspend “any active security clearances held by individuals at entities associated with Krebs, including SentinelOne, pending a review of whether such clearances are consistent with the national interest.”

The Wall Street Journal was first to report on Krebs’ departure from SentinelOne, publishing a story on Wednesday based on an interview with Krebs. He told the Journal that he was leaving to push back on Trump’s efforts “to go after corporate interests and corporate relationships.”

The demands on SentinelOne resemble campaigns that President Trump has waged against law firms and universities that he’s tried to strongarm into making significant changes in how they operate or else lose government contracts or funding.

SentinelOne, which uses artificial intelligence to detect threat and prevent cyberattacks, doesn’t disclose how much of its revenue comes from the government. But the company acknowledges in the risk factors section of its financial reports that it relies on government agencies for some of its business and can be hurt by changes in policy.

“Our future growth depends, in part, on increasing sales to government organizations,” the latest quarterly filing says. Specific to Trump, SentinelOne said that the establishment of the Department of Government Efficiency, which Elon Musk is running, could lead to budgetary changes that “adversely affect the funding for and purchases of our platform by government organizations.”

SentinelOne CEO Tomer Weingarten told employees in a memo, also posted to the company’s site on Wednesday, that Krebs “helped shape important conversations and strengthened public-private collaboration.” The company previously said, in a blog post after the executive order, that fewer than 10 employees had security clearances.

“Accordingly, we do not expect this to materially impact our business in any way,” the post said.

WATCH: Krebs on cyberthreats