Meet the Super Semiconductor Stock That Isn't Nvidia, AMD, or Broadcom

When investors deliberation astir semiconductor stocks, Nvidia, Advanced Micro Devices, and Broadcom usually get astir of the attention. But each these companies trust heavy connected 1 institution to manufacture their chips, and that is Taiwan Semiconductor Manufacturing (NYSE: TSM).

Will AI make the world's archetypal trillionaire? Our squad conscionable released a study connected the 1 little-known company, called an "Indispensable Monopoly" providing the captious exertion Nvidia and Intel some need. Continue »

TSMC, arsenic it's besides known, is the largest pure-play foundry, controlling implicit 70% of the planetary market. The planetary foundry marketplace is presently worthy astir $185 cardinal and is expected to turn to astir $360.5 cardinal by 2036.

Since Taiwan Semiconductor manufactures chips for galore designers and exertion giants, it benefits from the explosive industrywide request for cutting-edge chips and is not reliant connected immoderate azygous institution oregon technology.

TSMC's competitory presumption looks exceptionally strong. In 2025, 3-nanometer chips contributed 24% of its wafer revenue, portion 5-nanometer and 7-nanometer chips accounted for 36% and 14% of the wafer revenue, respectively. Overall, precocious technologies of 7-nanometer and beneath accounted for 74% of full wafer revenue. Additionally, TSMC besides commenced wide accumulation of the 2-nanometer chips successful precocious 2025.

This dominance is important, arsenic artificial quality (AI) and high-performance computing (HPC) applications are progressively depending connected cutting-edge spot manufacturing. While competing foundries specified arsenic Samsung and Intel are investing aggressively, they are inactive lagging successful advanced-node yield.

Management has besides reiterated its exertion enactment with 2-nanometer and A16 process nodes. The institution besides expects 2-nanometer to beryllium a bigger node than 3-nanometer from the start, with beardown request already disposable crossed smartphone and HPC AI applications. Hence, customers are relying connected TSMC to manufacture high-performance, power-efficient chips with precocious packaging.

TSMC's fiscal presumption is besides impressive. Revenue roseate 35.9% twelvemonth implicit twelvemonth to $33.7 billion. HPC, which includes AI demand, grew 48% twelvemonth implicit twelvemonth and accounted for 58% of the full revenues.

AI is already a coagulated maturation catalyst. Management said AI accelerator gross made up a high-teens percent of full gross successful 2025. AI gross is besides expected to turn astatine a mid- to high-50% yearly complaint from 2024 to 2029. The institution expects its wide revenues to turn astatine astir a 25% compound yearly complaint implicit that period.