TSMC nears $3 trillion market cap on AI-driven revenue surge

Taiwan Semiconductor Manufacturing Company’s latest results highlight rapid revenue growth and margin expansion driven by surging demand for AI and data-centre chips, positioning it to reach a $3 trillion valuation in the coming years.

Taiwan Semiconductor Manufacturing Company has become the linchpin of the global chip supply chain, and recent results have sharpened investor focus on whether the world’s pre-eminent foundry can ascend into the handful of firms with market values above $3 trillion. As demand for cutting-edge processors used in artificial intelligence and data centres surges, TSMC’s scale and technology lead are translating into outsized revenue gains and expanding profit margins.

The company already commands a dominant share of contract manufacturing for advanced nodes, supplying chips for high-growth clients including Nvidia, AMD, Arm and Apple. Industry commentary highlights that TSMC produces the majority of the planet’s most sophisticated semiconductors, positioning it to capture a large slice of the multi-year ramp in AI infrastructure spending that has lifted volumes for 3nm and 5nm processes.

TSMC’s official results for the quarter ending 31 December 2025 underline that momentum. The earnings release shows consolidated revenue exceeding NT$1,046 billion and diluted EPS of NT$19.50 per ordinary share (US$3.14 per ADR), with year-on-year increases across the top and bottom lines and gross and operating margins moving higher. Independent reporting earlier in the year also noted a strong run of quarterly sales and record annual revenue, driven by surging orders for AI-focused GPUs and other high-performance parts.

Profitability improvements reflect both richer product mix and high factory utilisation. The company’s published figures record elevated gross and operating margins in the latest quarter, while management has guided to continued robust revenue growth in the near term, citing sustained demand from high-performance computing and AI customers that is keeping advanced-node capacity tight.

Market analysts are modelling how those revenue trends could map to valuation milestones. Using consensus revenue forecasts, some projections show TSMC moving into striking distance of a $3 trillion market capitalisation if growth persists through the latter half of this decade. Consultancy estimates for total high-end semiconductor sales this year add context to that upside, suggesting a large and expanding market for the technologies TSMC specialises in.

Even after recent share-price gains, the stock’s multiples remain a key part of the investment debate. Commentators point out that forward earnings multiples are modest relative to the company’s strategic position, and that ongoing margin expansion and revenue growth from AI and data-centre chips form the backbone of bullish cases that see substantial upside if the secular cycle continues. At the same time, investors must weigh execution risks, capital-intensity and the competitive dynamics of foundry investments when assessing whether TSMC will reach the valuation club occupied by the very largest technology names.

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Source: Noah Wire Services