TSMC Shares Surge 74% YTD on AI Demand, $87B Revenue Outlook

Taiwan Semiconductor Manufacturing Company (TSMC) dominates the global advanced chip manufacturing market, with its 3nm and 5nm chips accounting for 60% of sales and a leading position in high-performance computing (HPC) chips, which now represent 60% of its revenue. TSMC's prominence is bolstered by strong demand from major North American tech firms like Nvidia, OpenAI, and Microsoft, who rely on its cutting-edge chips for AI data centers, contributing to expectations of robust growth amid a projected $4 trillion AI investment over the next five years. Recent partnerships in the AI sector, such as OpenAI's multibillion-dollar deal with AMD, have further fueled semiconductor demand and investor confidence, pushing TSMC shares to record highs. The company is also expanding manufacturing capacity in the U.S., with a $65 billion investment in Arizona fabs set to produce advanced 2nm and 3nm chips domestically, partly supported by the U.S. CHIPS Act, to mitigate geopolitical risks and support client diversification. Analysts predict TSMC's 2025 revenue could exceed prior growth forecasts, driven by structural AI demand rather than cyclical trends, reflecting a significant shift from mobile devices to AI data centers as the main revenue driver. This strategic positioning keeps TSMC well ahead of competitors like Samsung and solidifies its role as a critical engine behind the semiconductor revolution.