In the context of ongoing tariff disputes, the chip Industry is also facing a severe test, and concerns among investors about whether the demand for AI Chips can continue to grow are intensifying.

For the market's major concerns regarding "tariffs and AI," the earnings reports of major players ASML Holding and Taiwan Semiconductor this week are crucial, with the market focusing on their performance guidance and orders.

The answer is now half out, $ASML Holding (ASML.US)$ New Orders in Q1 dropped sharply by 45%, far below expectations, maintaining the full-year sales guidance unchanged. Taiwan Semiconductor will announce its Earnings Reports on Thursday, and Analysts expect Taiwan Semiconductor to lower its performance guidance.

Regarding tariff risks, MorningStar Analyst Phelix Lee believes:

Ultimately, the industry's tariffs will make investing in USA datacenters riskier and may trigger a comprehensive slowdown in new datacenter construction, further increasing profit risks for Taiwan Semiconductor and its supply chain.

Due to the dual impact of tariff threats and future AI demand concerns, Taiwan Semiconductor and ASML Holding are at the forefront, experiencing a significant market decline. ASML's stock price once fell to the lowest level since the outbreak of the COVID-19 pandemic, while Taiwan Semiconductor's stock price has dropped over 20% this year. Following the release of the Earnings Reports today, ASML's American stock prices fell by more than 5% in after-hours trading.

Quilter Cheviot Technology Analyst Ben Barringer stated:

Both ASML and Taiwan Semiconductor's stock prices are significantly discounted, and many risks have evidently been priced in. However, due to the uncertainty surrounding semiconductor tariffs, without more specific information, it is challenging to see a revaluation.

ASML Holding emphasizes that tariffs add "demand uncertainty."

On April 16, ASML Holding's latest Earnings Reports confirmed market concerns. As previously mentioned by Wall Street, ASML's new order amount for the first quarter of the 2025 fiscal year was only 3.94 billion euros, far lower than the market expectation of 4.82 billion euros, a significant decrease of 44.5% from the previous quarter's 7.088 billion euros, with EUV equipment orders accounting for 1.2 billion euros. In terms of performance guidance, ASML maintains its sales guidance for 2025, expecting second-quarter sales to be between 7.2 billion and 7.7 billion euros.

ASML Holding CEO Christophe Fouquet clearly pointed out in a statement that recent tariff policies have increased uncertainty in the macro environment, affecting the company's prospects for 2025 and 2026.

On Monday, Trump announced the exemption of reciprocal tariffs on Smart Phones and Other Electric Appliances, leading to some signs of easing in the Global Semiconductors stock market; however, analysts believe that this easing may not last long and the exemption is only temporary.

According to Xinhua News Agency, the relevant online platform of the USA government quietly released information last Friday evening, granting exemptions from so-called "reciprocal tariffs" on Smart Phones, laptops, chips, and other electronic products. Trump proposed on Monday this week that there is a possibility of exempting import tariffs on Autos and parts, but also hinted at imposing new tariffs on chips and pharmaceuticals.

In addition to direct tariffs, there are concerns that the comprehensive increase in tariffs will suppress economic growth, which is undoubtedly a bad sign for an Industry highly sensitive to economic cycles. For AI Chips, although there is still strong demand, the question is how long this demand can be sustained.

Taiwan Semiconductor's performance is also not optimistic, will it lower future guidance?

$Taiwan Semiconductor (TSM.US)$ The performance situation does not seem optimistic, as more and more Analysts predict that Taiwan Semiconductor's performance will be weak, and they are sequentially lowering its stock price targets.

Previously, Taiwan Semiconductor predicted a revenue growth rate of around 20% in 2025. Now, JPMorgan expects the company may slightly lower this growth target to the lower end of the mid-20% range. Deutsche Bank stated that as customers adjust to tariff changes, Taiwan Semiconductor may also revise its performance guidance.

Nori Chiou, Director of White Oak Capital Partners, stated that

the earnings that chip manufacturers are about to announce are "unlikely to be too bad," as demand for AI remains strong. However, uncertainty regarding AI demand is rising for next year, and policy fluctuations could impact the formulation of the next round of long-term plans, which is worth close attention.

In addition to tariff headwinds, both Taiwan Semiconductor and ASML Holding are facing issues. Reports of potential collaboration with Intel have cast a shadow over Taiwan Semiconductor's prospects, and Analysts question the rationality of this strategic move. Furthermore, Taiwan Semiconductor's commitment to invest 100 billion dollars in the USA may burden the company's future profit margins.

For ASML Holding, the spending plans of its main customer Intel continue to change, while another major customer, Samsung Electronics, faces challenges in increasing the production of advanced chips.

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