Taiwanese semiconductor manufacturer founded by Morris Chang in 1987. Chang made a contrarian bet that a firm focused purely on manufacturing—a "foundry"—could outperform vertically integrated chipmakers like Intel, AMD and Texas Instruments. The bet transformed the industry.
In terms of revenue, TSMC produces two-thirds of all chips made by foundries. In the most advanced segment, including processors for smartphones, laptops and data centres, the company's share exceeds 90%. Almost all AI accelerator chips are made by TSMC: Nvidia, the world's most valuable company, relies entirely on the firm, as does AMD. Big tech firms including Alphabet, Amazon, Apple and Microsoft, each designing bespoke silicon, also turn to TSMC. Jensen Huang, Nvidia's boss, has said his firm "would not be possible without TSMC".
Between 2014 and 2024 TSMC's annual revenues rose from $24bn to $88bn. Its market value has reached $1trn, making it the eleventh-most valuable company in the world. Since the launch of ChatGPT in November 2022, TSMC's share price has more than doubled. Its net profit margin was 40% in 2024, more than three times the average for rival foundries. TrendForce estimates 2025 capital expenditure of $38bn-$42bn, dwarfing Samsung's ~$3.5bn on its foundry arm and Intel's $8bn-$11bn. More than two-thirds of the spending is allocated to the cutting-edge chips the AI industry requires. Analysts expect capex to reach $52bn by 2027. As a share of revenue, however, TSMC's capital expenditures have fallen, and are expected to continue doing so—reflecting the company's caution, shaped by the semiconductor industry's history of booms and busts. C.C. Wei, its chief executive, has said capacity for AI-related products "is very tight". A top-tier fab costs around $20bn and takes three to four years to complete. TSMC ramped up investment during the pandemic to ease shortages of less advanced chips; now its capacity to produce them is underused, and the company is wary of repeating the mistake with AI. In 2025, 52% of revenue is expected to come from chips on its most advanced nodes (5nm and below); by 2027 the share is expected to reach about 70%.
Just 7% of its net sales are to Chinese firms, compared with 77% to firms in North America. In November 2024 the American government prohibited TSMC from offering its most advanced services to Chinese customers. Some Taiwanese see the island's chip dominance as a "silicon shield" protecting it from Chinese coercion, since Taiwan's friends would have no choice but to help break any blockade. Others argue the opposite: precisely because Taiwan's chips are so indispensable, the world might accede to Chinese demands to ensure supply continues. Analysts at the Baker Institute, an American think-tank, suggest China might even try to engineer a sale of TSMC to Chinese entities in return for lifting a quarantine. In 2022 Mark Liu, then TSMC's chairman, warned that a Chinese invasion would render the fabs inoperable, since they depend on a "real-time connection with the outside world". Elbridge Colby, the Pentagon's policy chief, has suggested the fabs should be destroyed if China invades.
TSMC produces Nvidia's high-end AI chips in its Taiwanese factories. America has banned TSMC from manufacturing the most advanced chips for China, leaving Chinese chip designers reliant on SMIC, a state-owned foundry. SemiAnalysis, a consultancy, has reported that Huawei continues to purchase wafers from TSMC via a third company; both TSMC and Huawei deny the claim.
TSMC plans to spend about $55bn in 2026, up by 34% from 2025; analysts expect the figure to rise to $65bn in 2027. But as a share of sales, its capital expenditure has fallen from around half in 2022 to a third in 2026. Its most advanced fabs—those making chips that are five nanometres or smaller—are already running flat out. C.C. Wei admits that "there are no shortcuts": building a new fab takes two to three years. The price to rent one of Nvidia's H100 GPUs, launched in 2022, has soared by around 30% since November 2025, as customers unable to get their hands on newer models have resorted to older generations. Sam Altman has urged TSMC to "just build more capacity". Elon Musk has said he will build a "Terafab" with the ambition of churning out more processing power annually than the entire global semiconductor industry today, enlisting Intel to help; the facility is unlikely to start production until 2028 at the earliest, and even then at a fraction of the scale envisioned.
TSMC has said every 1% rise in the Taiwan dollar pinches its operating margin by 0.4 percentage points.
A chip shortage in 2021 is thought to have led to $500bn in forgone sales globally.
In July 2025 TSMC signed a 20-year deal with Orsted, the world's biggest offshore-wind developer, to purchase all the power from a 920-megawatt wind farm off the coast of Taiwan.
In Taiwan, TSMC operates four "gigafabs", each with at least four times the capacity of a typical factory. Fab 18 in Tainan alone spans 950,000 square metres. S&P Global estimates that in 2023 TSMC accounted for 8% of Taiwan's electricity use; by 2030 its share could rise to nearly a quarter. Land is also a constraint: its newest fab in Kaohsiung, spanning 79 hectares, was built on a former oil refinery and required soil reclamation. Taiwan's fertility rate of just 0.9 means competition for engineers will intensify as the working-age population shrinks.
Over the past five years TSMC has embarked on a $190bn global expansion. Of that, $165bn is going to the American state of Arizona, where the firm plans to operate six leading-edge fabs. Arizona could eventually house as much as a third of TSMC's most advanced capacity. The first fab is producing four-nanometre chips; two more are under construction, with another three to follow. Around 1,000 Arizona-based engineers were sent to TSMC's "mother fab" in Tainan for 12 to 18 months of training, and a similar number of Taiwanese engineers later joined them in Arizona.
In mid-October 2025 TSMC produced a wafer for Nvidia's most advanced GPU, Blackwell, at its Arizona fab—the first time one of Nvidia's cutting-edge processors was fabricated on American soil.
TSMC recently started an apprenticeship programme in Arizona, where process-technician apprentices take community-college courses in nanotechnology paid for by TSMC while working towards an associate's degree.
The first Arizona fab is reportedly producing chips for Apple at yields comparable to those in Taiwan. However, Lisa Su, AMD's boss, estimates chips made in Arizona may cost up to 20% more than those from Taiwan. C.C. Wei, TSMC's boss, said in May 2025 that the Arizona effort was "being constrained by the labour shortage" in the state. Wendell Huang, TSMC's finance chief, admitted the company was surprised by delays in Arizona's permit process.
Donald Trump, who derided the CHIPS Act as wasteful, pushed TSMC to make more chips on American soil by threatening tariffs. TSMC pledged another $100bn for Arizona; Wei explained that a smaller sum "wouldn't even make Trump open his eyes". Some American officials have floated the idea of TSMC partnering with Intel; Huang compared such a deal to pouring gasoline into a diesel engine. Even by the end of this decade, when a third Arizona fab is due to begin producing two-nanometre chips, two-thirds of such semiconductors are likely still to be made in Taiwan. TSMC's model is based on innovating at home first, before spreading its advances around the world.
TSMC set up a plant in Kyushu, Japan's south-western island, which has positioned itself as "Silicon Island". Its first fab there, run through JASM, a joint venture with Sony and Denso, began producing logic semiconductors for cars and electronics in December 2024. It produces chips of 12-28nm—the most advanced type to be produced in Japan so far, but well behind TSMC's state-of-the-art. A second facility for higher-end logic chips will break ground in 2025 and should be running in 2027; talks about a potential third fab are reportedly under way. At the launch, Morris Chang, the TSMC founder, spoke of a chip "renaissance".
Big subsidies helped entice TSMC to Kyushu. The Japanese government ploughed Y3.9trn ($27bn) into semiconductor support between early 2020 and early 2024. TSMC's arrival has enticed over 60 companies to establish a presence in Kumamoto. Wages have risen, pushed up by TSMC's relatively high pay. Land prices have soared. Kyushu Financial Group estimates the economic impact in Kumamoto will reach Y11trn ($76bn) over the next decade. Hundreds of Taiwanese engineers and their families have arrived, making the area multicultural: signs appear in Japanese, English and Chinese, local city halls have hired Chinese-speaking staff, and a new international school has opened.
As the poet said, "Only God can make a tree" -- probably because it's so hard to figure out how to get the bark on.