Taipei: Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, on Tuesday reported its highest ever sales for May, with market analysts attributing the strong showing to robust demand for the company's high-end processes in the booming artificial intelligence era. In a statement, TSMC said it posted NT$320.52 billion (US$10.71 billion) in consolidated sales in May, up 39.6 percent from a year earlier.

According to Focus Taiwan, the May figure was the second highest ever monthly sales in the company's history, trailing a record high of NT$349.57 billion recorded in April, with a month-on-month decline of 8.3 percent, TSMC's data showed. In the first five months of this year, TSMC generated about NT$1.51 trillion in consolidated sales, up 42.6 percent from a year earlier, according to the chipmaker.

At an investor conference held in mid-April, TSMC forecast its sales for the second quarter would range from US$28.4 billion to US$29.2 billion, with the median figure expected to rise 13 percent from the first quarter. The expected growth largely reflects strong demand for TSMC's high-end processes, such as the 3 nanometer and 5nm processes, in the current AI boom. The 3nm process is the latest technology for which TSMC has started commercial production.

However, a stronger Taiwan dollar against the U.S. dollar could affect TSMC's bottom line. The chipmaker has said whenever the Taiwan dollar appreciates against the greenback by 1 percent, its gross margin is reduced by 0.4 percentage points. In April, TSMC forecast its gross margin would range from 57 percent to 59 percent, with the median figure likely to fall 0.8 percentage points from the first quarter due to higher production costs in the chipmaker's overseas facilities.

TSMC Chairman C.C. Wei noted at the company's annual general meeting last week that the Taiwan dollar has risen against the U.S. dollar by almost 8 percent in recent sessions. As a result, the company's operating margin has been reduced by more than 3 percentage points. The impact resulting from a higher Taiwan dollar has been large, Wei admitted, but said TSMC will seek to maintain its lead over its peers in technology development and sell products at reasonable prices.

Despite uncertainties created by the Trump administration's tariff policies, TSMC has left unchanged its forecast that the company's sales in 2025 will grow 24-26 percent from a year earlier.