TSMC's AI Chip Dominance Propels Global Ranking and Revenue Growth

The AI boom sends TSMC, the world's most important chipmaker, up 60 spots on the Global 500

Wei took center stage in March, when he joined U.S. president Donald Trump in the White House to announce an additional $100 billion investment into TSMC's Arizona operations. Wei then met Taiwan's president Lai Ching-te after meeting Trump. "If someone had told me 10 years ago that I'd meet two presidents in one week to discuss hundreds of billions of dollars in investments to expand our global footprint, I would have thought they were joking," CEO C.C. Wei told Fortune in written comments. On this year's Global 500, Fortune's annual ranking of the world's largest companies by revenue, TSMC rose 60 places to reach No. 126 on this year's Global 500, following a 30% jump in 2024 revenue to reach over $90 billion. It's also the 13th most profitable company on this year's ranking, earning $36 billion in profit, putting it ahead of Bank of America, Exxon Mobil and Toyota. And TSMC is one of just two non-Western companies to surpass $1 trillion in market value, alongside Saudi Aramco. TSMC joined the Global 500 in 2015, coming in at No. 472. It's steadily climbed the rankings since then, overtaking its U.S. rival Intel in 2023. The AI boom is set to propel TSMC even further. In its most recent quarter, TSMC's revenue rose by more than 40% year-on-year to hit $30.1 billion. Sixty percent of its sales came from its high-performance computing division, which encompasses AI and 5G applications. "TSMC's near-term outlook is especially strong, fuelled by robust AI demand and sustained capital expenditures from cloud service providers," said William Li, a senior analyst at Counterpoint Research. Wendell Huang, TSMC's chief financial officer, says he expects AI to continue accelerating the company's business, with a compound annual growth rate in the mid-40% range over the next five years. And while Huang is paying attention to growing consumer and enterprise use of AI, he's also interested in a relatively newer development: "sovereign AI". Many governments are now seeking more domestic control over the entire AI tech stack, including datasets, data centers, AI models and applications. The goal is to foster local development and reduce reliance on the U.S. and China, the current leaders in AI. Greater investment in local facilities will, in turn, drive demand for AI chips like Nvidia's GPUs, and in turn boost the sales of chipmakers like TSMC. Analysts point to TSMC's dominance in leading-edge technologies, its ability to deliver high-performance chips, and its close connections with key clients like Nvidia and Apple for its success. But Huang thinks TSMC's success is due to something more fundamental: The company is purely a contract chipmaker, with no products of its own. That means it can't, and won't, compete with its customers. Take two of TSMC's closest competitors: Samsung Electronics and Intel. In addition to making chips, both companies also sell their own devices. Samsung sells smartphones while Intel sells computers and other personal computers-products that may compete with what their potential customers may also be selling. Huang added that TSMC can work with customers years in advance, allowing the chipmaker to invest and innovate to make the right product for customers. But TSMC's importance, as well as its headquarters on the island of Taiwan, means the chipmaker is one of a handful of companies whose decisions have geopolitical consequences. "TSMC's elevated strategic importance means it can't avoid being affected by U.S.-China tech competition," said Galen Zeng, senior research manager for semiconductor research at IDC Asia/Pacific. U.S. export control measures bar TSMC from exporting its most sophisticated chips to China; the company also stopped exporting chips to Huawei, which is on Washington's trade blacklist, since 2020. Yet late last year the U.S. launched a probe to investigate how TSMC-manufactured products made their way into devices from Huawei. TSMC later blamed a customer for secretly funnelling chips to Huawei. Still, TSMC may benefit from a brief pause in the U.S.-China tech conflict, after Washington allowed companies like Nvidia to start selling some of their leading AI processors to China again. "It's very positive news for them, and in return it's very positive news for TSMC," Wei told shareholders a few weeks ago. TSMC currently has most of its plants in Taiwan. It has two in mainland China and has opened new foundries in the U.S. state of Arizona and on the Japanese island of Kumamoto. TSMC is also currently building a new plant in Germany. The chipmaker consistently says that overseas foundries are a direct response to customer needs. In his email, Wei said many customers tell him how "crucial" these overseas factories are, "emphasizing the importance of TSMC's world-class manufacturing expertise with geographic flexibility in production." He said he didn't consider himself an "expert in geopolitics," adding that he takes pride "in being attuned to delivering what my customers require." Wei also remembered how founder Morris Chang reminded executives to "jump through hoops" for its customers. And he took a humble position on TSMC's continued climb up the global rankings of the world's largest companies by revenue. "It's a great encouragement to go up on the Fortune Global 500," he wrote, "but the best sign of our success is if our customers are on the list -- or even higher than TSMC."

1 Reason Wall Street Is Obsessed With Taiwan Semiconductor Manufacturing | The Motley Fool

The semiconductor giant is well positioned for continued dominance in the AI chip space. Few companies dominate their industry like Taiwan Semiconductor Manufacturing (TSM -0.63%) (TSMC) does in the semiconductor (chip) space, and Wall Street has taken notice. Through July 25, TSMC's stock is up close to 22% in 2025, while the S&P 500 index is up around 9%. TSMC has been a vital piece of the tech world for years, supplying chips to top companies that power everything from smartphones to electric vehicles to gaming consoles to data centers. That has made TSMC a stock market darling for quite some time, but Wall Street's recent obsession with the stock comes down to one thing: artificial intelligence (AI). Some don't see TSMC as a traditional AI stock, but its role in the AI pipeline is one of the more important. It's essentially the supplier for the advanced AI chips that are critical for training, deploying, and scaling AI models. Without TSMC's chips, the AI world as we know it today would be much less advanced. TSMC's AI chip dominance has begun reflecting in its financials, too. In the second quarter, TSMC reported a record $30 billion in revenue (up 44% year over year), with high-power computing (which includes AI chips) accounting for 60% of it. There's no doubt that AI adoption is rapidly growing. With TSMC's chips being the foundation that will make this adoption possible, the company is well positioned to continue its impressive revenue growth. The company projected its AI accelerator revenue to produce a compound annual growth rate (CAGR) in the mid-40% range from 2024 until 2029, and it's well on its way to accomplishing this.