“`html
The global generative AI market is expected to reach $67 billion in 2023 and grow to $442 billion by 2031, reflecting a compound annual growth rate (CAGR) of 37%. Nvidia currently holds about 90% market share in graphic processing units (GPUs) essential for AI applications. However, Taiwan Semiconductor Manufacturing (TSMC), a major chip foundry listed on NYSE as TSM, plays a critical role in this sector by manufacturing GPUs designed by companies like Nvidia.
In 2024, TSMC produced nearly 11,900 different products and is involved in about 85% of global semiconductor start-up prototypes. The company reported a revenue of $10.85 billion in May 2025, marking a 40% increase from the previous year. TSMC also projected a 20% CAGR in overall revenue and a 45% CAGR in AI-related revenue over the next five years. Its current trailing price-to-earnings ratio is approximately 28, with a forward P/E of around 23.
TSMC announced a $100 billion expansion plan, which includes building three new fabrication plants in the U.S., reinforcing its position in the semiconductor market. The company’s strong operating margins, combined with nearly $700 billion in free cash flow, highlight its potential for continued profitability amid the growing demand for AI technologies.
“`
