Semiconductor giant TSMCTSM

once again proves that the chip boom isn’t over, beating revenue and profit expectations in Q1 thanks to stronger AI demand. Revenue climbed by 16.5% compared to the previous year, with net income also rising by 8.9% — and looking ahead to Q2, TSMC foresees continued success:

• The company said sales could jump 30% in Q2 from the year-before period, fueled by what its CEO describes as “insatiable AI-related demand.”
• TSMC also benefits from growing demand for AI servers, projected to contribute 20% of its revenue by 2028.

So why are chip stocks down? TheSOXX

iShares Semiconductor ETF has dipped ~5% in the past month, dragged by falling shares of AMDAMD

and IntelINTC

— as investors wonder if AI stocks have gotten a bit too hot. With demand for new chip-building machinery still stagnant and China’s growing preference for domestic chipmakers contributing to the decline, TSMC could face problems — especially given the complex relationship between China and Taiwan.