This article first appeared on GuruFocus.
Taiwan Semiconductor Manufacturing Company (NYSE:TSM) is sharpening its focus on AI-grade chips as cloud and hyperscaler demand expands, industry data and company results show.
Analysts estimate the global data-center market could exceed $650 billion by 2030, and TSMC supplies the advanced nodes that power many high-performance processors. The foundry handles most of the cutting-edge work, producing wafers for firms such as Nvidia (NASDAQ:NVDA), AMD (NASDAQ:AMD), Apple (NASDAQ:AAPL) and Broadcom (NASDAQ:AVGO), and controls a large share of advanced node capacity.
TSMC’s recent results underline that demand. The company reported roughly $33.1 billion in revenue in Q3 2025, up about 41% year-over-year, with advanced nodes representing the bulk of wafer revenue. Its High Performance Computing segment grew strongly, reflecting orders for GPUs and data-center accelerators.
Two technical strengths stand out: leading-edge process nodes that are moving from 3nm into 2nm production lines, and CoWoS advanced packaging that lets multiple dies work together in high-bandwidth packages. Those capabilities help solve bandwidth and yield limits for next-generation AI chips.
TSMC is also expanding geographically. It’s the Arizona project, originally sized at $65 billion, and European plans aim to diversify manufacturing and ease geopolitical risks tied to heavy concentration in Taiwan.
Still, risks are there. The planning of a big capex, predicted to touch $40-50 bn by analysts by 2026, and the geopolitical strife may scramble the supply chains of the company. It is a comparison of the valuation of TSMC being premium to some of its peers but lower than some of the AI chip customers, which can allow varying market interpretations.
On the whole, these clients and investors are considering TSMC to act as a key supplier in the artificial intelligence cycle. The market observers are monitoring unfolding of the new fabs and the growth of the capacity to match the demand.