Taiwan Semiconductor Manufacturing (TSMC) and Micron Technology are experiencing robust growth as the semiconductor industry expands rapidly. Bank of America estimates the industry's revenue could surge by 25% in 2026 to nearly $1 trillion, driven by a 50% increase in demand for AI chips.
TSMC, the world's largest contract chip manufacturer, serves over 500 customers and produces close to 12,000 types of chips for companies including Apple, Nvidia, Advanced Micro Devices, Broadcom, and Qualcomm. According to Counterpoint Research, TSMC held a 72% share of the global foundry market in the third quarter of 2025, up from 66% a year earlier.
The company's earnings jumped an estimated 49% in 2025 to $10.46 per share, outpacing the S&P 500's average earnings growth of 16%. TSMC's earnings are projected to continue growing at rates exceeding 20% in 2026 and 2027. However, the company's fabrication lines are currently sold out, with customers paying premiums for faster chip manufacturing. If TSMC achieves a 35% earnings growth rate in 2026 and 2027, its earnings could reach $19.07 per share.
Micron Technology's earnings are estimated to increase by 291% in the current fiscal year to $32.43 per share. This growth stems from favorable memory market dynamics, with demand significantly outpacing supply due to strong AI data center requirements. TrendForce anticipates a 50% to 55% jump in DRAM average prices this quarter compared to the fourth quarter of 2025.
Memory chips are reportedly sold out for 2026, and the shortage may continue through 2028. Micron currently trades at a forward earnings multiple of 11, below the Nasdaq-100's multiple of 26. If the stock reaches 20 times forward earnings and hits the $40.23 earnings estimate, its share price could exceed $800.
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