Key Points
Taiwan Semiconductor Manufacturing Company (TSMC) is well-positioned to benefit from the anticipated surge in demand for chips, as global data center capital expenditures are projected to soar from $600 billion in 2025 to between $3 trillion and $4 trillion by 2030. TSMC manufactures chips for major companies like Nvidia, AMD, and Broadcom, which design but do not produce their own chips.
In 2026, heightened demand for chips is expected to surpass previous levels, with Nvidia reporting they are “sold out” of cloud graphics processing units (GPUs) and companies needing to place orders years in advance. TSMC is developing next-generation chips that consume 25% to 30% less power at the same speed, addressing energy consumption concerns that could impact the AI buildout.
Investors should note that TSMC’s revenue growth will be driven by its unique position in the supply chain, allowing it to thrive regardless of which chip designer leads the market. Given its capabilities and market forecasts, TSMC is considered a strong investment opportunity as AI technology advances.
