DISCLAIMER: The information in this article is provided for general informational purposes only and should not be considered financial advice. Readers are encouraged to conduct their own research or consult a licensed financial advisor before making any investment decisions.
Investors often focus on the “Magnificent Seven” driving the surge in artificial intelligence and market dominance. Yet, one company quietly powers this entire technological revolution from behind the scenes. This firm supplies nearly every major AI player with the advanced chips they rely on.
That company is Taiwan Semiconductor Manufacturing, traded as TSMC on the New York Stock Exchange. With a market value already reaching $1.5 trillion, it has become indispensable to the artificial intelligence ecosystem. Still, many analysts believe Wall Street continues to underestimate its long-term potential.
The Backbone of the AI Revolution
Over the next few years, data centers worldwide are projected to spend trillions to expand artificial intelligence infrastructure. While chip designers like Nvidia get most of the headlines, they do not build their own processors. Instead, TSMC does the heavy lifting, manufacturing nearly all of Nvidia’s advanced chips.
This unique position makes TSMC the keystone of the global AI supply chain. Few competitors can match its ability to produce the world’s most advanced semiconductors, granting it near-monopolistic control in this critical market.
Such dominance has fueled explosive growth. Over the past decade, the company’s revenue has surged by more than 330%, reaching $116 billion. With its pricing power unmatched, TSMC recently posted an operating margin exceeding 50%, a figure rarely seen in large-scale manufacturing.
As artificial intelligence investment accelerates, demand for TSMC’s semiconductor capacity will only intensify. The company’s revenue already climbed 41% year over year, and projections suggest it could surpass $200 billion by 2027. Maintaining its current margin would translate into roughly $100 billion in annual operating profits.
Building America’s Next Tech Stronghold
While Taiwan remains the global center of semiconductor production, geopolitical risks tied to China have spurred major diversification. The U.S. government, along with TSMC’s biggest clients such as Apple and Nvidia, has strongly encouraged expansion onto American soil.
TSMC plans to invest about $165 billion in advanced manufacturing facilities in Arizona. Such a massive commitment reflects confidence that these factories will fuel future growth. Industry leaders, including OpenAI’s Sam Altman, have even urged TSMC to ramp up production faster to meet the rising global appetite for AI chips.
Despite revenue climbing at impressive rates, TSMC’s production capacity still trails the surging market demand. This gap highlights the scale of opportunity awaiting the company as it continues expanding its manufacturing footprint.
Can TSMC Reach the $3 Trillion Mark?
Unlike many of the Magnificent Seven, TSMC trades at a moderate valuation with a price-to-earnings ratio near 31. As it continues scaling operations in both Taiwan and the United States, that number could quickly fall.
If the company sustains its current 40% annual growth rate, it could double its revenue by 2027. At that point, with projected earnings of $100 billion and a valuation multiple of 30, its market capitalization would likely reach the $3 trillion milestone.
While risks remain—such as potential margin pressure or slower-than-expected demand growth—the long-term outlook remains favorable. For patient investors, TSMC represents one of the most promising opportunities in the artificial intelligence sector.
The company has already cemented itself as the backbone of global chipmaking and shows no signs of losing that title. Through future market cycles, it is expected to remain a dominant force in powering the infrastructure behind the world’s artificial intelligence expansion.
