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Artificial intelligence (AI) is far from a new technology. People have been using it for quite some time, knowingly or not. However, the current rise of AI it’s a technological inflection point that many would argue we haven’t seen since the introduction of the Internet.
As with any new industry trend, there has been a lot of investor optimism, but at some point that turns into speculation. We have seen this story many times in the market. This is not to say that AI is a bubble (the technology is here to stay), but current valuations rightly prompt skepticism.
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Fortunately, there is one company that is a key piece to the AI supply chain that you can count on independently: Taiwan Semiconductor Manufacturing (NYSE: TSM).
A good way to understand TSMC’s AI role is to work backwards from the AI applications and tools people use every day. For these AI tools to be effective, they need to be trained on more data than you can imagine. This data is stored and AI models are trained within data centers containing hardware such as graphics processing units (GPU)AI accelerators and central processing units (CPUs).
Different companies design these pieces of hardware, but they have one thing in common: they trust TSMC to make their chips and bring them to life. It has a virtual monopoly on making advanced AI chips because it is the company that tech companies rely on the most to be efficient and manage the necessary scale.
If the current AI boom slows or turns out to be a bubble, many companies will fail or find themselves in trouble, struggling to turn their businesses around. TSMC is not one of them. Companies like Apple relying on TSMC to make its smartphone chips; Nvidia depends on it for its GPUs; Tesla trust him for his self-driving chips; Broadcom trust it for your network hardware; and there are many more companies you can connect there.
AI-related revenue has certainly contributed to TSMC’s growing demand and earnings in recent years. It had its best year in 2025, with revenue of $122 billion (almost 36% more than the previous year).
Without AI, TSMC’s growth would take a hit, of course. However, it would be far from detrimental to TSMC’s long-term global business.
Tech hardware will continue to need chips, and most tech companies will continue to rely on TSMC. With chipmaking having such a high barrier to entry, as long as TSMC continues to invest in improving its technology and expanding its capabilities, it should remain the world’s largest chipmaker for some time.
