Taiwan Semiconductor Manufacturing (TSMC) manufactures virtually all advanced AI chips, with its capabilities far exceeding those of competitors. The company's stock rose nearly 54% in 2025, reaching a market capitalization over $1.7 trillion as of January 13.
High-performance computing has become TSMC's largest revenue source, overtaking smartphones. In the third quarter of 2025, high-performance computing accounted for 57% of revenue compared to 30% from smartphones. Revenue from this segment reached $18.87 billion in that quarter, up from $7.26 billion in the third quarter of 2023.
TSMC operates on a foundry model, producing chips for companies like Apple and Qualcomm rather than selling directly to consumers. The company holds approximately 72% of the general chip foundry market share and over 90% for advanced AI chips. Samsung Electronics follows with 7% market share in the general foundry industry.
Stefon Walters holds positions in Apple and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Alphabet, Apple, Intel, Qualcomm, and Taiwan Semiconductor Manufacturing.