The Semiconductor and the Shadow of Fortune

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The matter of Taiwan Semiconductor Manufacturing, known to many as TSMC, is not merely a tale of silicon and circuits, but a reflection of the restless spirit of our age. This company, a titan in the fabrication of those minuscule engines of modern life – the semiconductors – holds a position of such singular dominance that it invites, not celebration, but a sober contemplation. To speak of a 60% compound annual growth rate in the realm of artificial intelligence chips through 2029 is to speak of a feverish ambition, a grasping for gains that, like all such pursuits, obscures the true cost. It is a boast, whispered among investors, that this growth suggests a sound investment. But let us not mistake the fleeting shimmer of profit for lasting value.

TSMC, it is true, stands as the principal architect of the most advanced AI accelerators, collaborating with the foremost designers to bring these creations to life. Nvidia, Apple, even the ambitious Intel – all depend upon the precision of TSMC’s foundries. This dependence, however, is not a sign of strength, but a precarious arrangement, a web of reliance that threatens to ensnare all involved. The forecast of this 60% growth, delivered with the confidence of those who measure progress solely in numerical terms, arrived in 2024, a prediction that remains, as yet, unconfirmed by the cold, hard reality of ledger books. Market share, it is reported, has indeed increased – from 64.9% in the third quarter of 2024 to 71% in the subsequent year. Samsung, its closest competitor, has seen its share diminish. Yet, what is market share but a measure of control, and what is control but a temptation to excess?

The true peril, however, lies not in the competition of other foundries, but in the very ground upon which TSMC’s empire is built. Taiwan, a small island burdened by a history of contention, exists under the shadow of a far larger power. The threat of invasion, a specter that has haunted these shores for decades, is a constant companion. To place such a vital component of the global economy in such a vulnerable position is not shrewdness, but a reckless gamble. It is as if one were to build a palace of glass upon the edge of a precipice and declare it secure. Even the late Warren Buffett, a man not easily swayed by sentiment, recognized this danger, reversing Berkshire Hathaway’s investment three years prior. He, at least, understood that some risks outweigh even the most enticing returns. One wonders if the current generation of investors, blinded by the allure of quick profits, possesses such foresight.

The Figures and Their Deceptions

The company’s financial statements, presented with the usual air of optimism, reveal a revenue increase of 31% in 2025, reaching a sum of $122 billion. While the specific revenue generated by AI chips remains obscured – a convenient omission, one might observe – the revenue from high-performance computing, constituting 58% of the total, rose by 48%. Gross profit also experienced a surge, climbing from 56.1% to 59.9%. Comprehensive income, however, is a more complex matter, influenced by taxes and losses, ultimately rising by 33% to $53 billion. These numbers, presented as evidence of success, are merely symptoms of a larger, more troubling phenomenon: the insatiable appetite for growth that drives our modern world.

The forecast for the first quarter of the subsequent year anticipates a revenue increase of 38%. Analysts predict a similar rise for the year as a whole, a continuation of the previous year’s growth. The stock, predictably, has outperformed the S&P 500, rising by over 80% and reaching a record high. Yet, this very increase has driven the price-to-earnings ratio to 35, the highest level in nearly five years. To justify this valuation based solely on AI-driven growth is to indulge in a dangerous delusion. It is to mistake the ephemeral for the enduring, the transient for the timeless.

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A Question of Prudence

To ask whether TSMC stock remains a sound investment for the following year is to miss the point entirely. The geopolitical risks, though often downplayed, are real and cannot be ignored. The rising valuation, while perhaps justifiable in the short term, makes it unlikely that the stock will repeat its previous performance. Yet, even these concerns pale in comparison to the larger question: what is the true cost of this relentless pursuit of growth? TSMC’s dominance in the foundry market and advanced chip manufacturing is undeniable. Demand for AI chips shows no signs of abating. But these are merely technical details, symptoms of a deeper malaise. To simply buy and hold TSMC stock, hoping to outperform the market, is to surrender to the prevailing madness, to become another cog in the machine.

Perhaps, instead, we should pause and reflect. Perhaps we should ask ourselves whether this technology truly serves the betterment of humanity, or merely exacerbates our existing flaws. Perhaps we should remember that true wealth lies not in the accumulation of material possessions, but in the cultivation of wisdom and compassion. For in the end, it is not the silicon that will save us, but the soul.

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2026-02-26 22:34