TSMC: A Trillion-Dollar Fable

by

Taiwan Semiconductor Manufacturing, or TSM as the unimaginative abbreviate it, finds itself in the enviable position of being utterly indispensable. A curious fate, to be essential in an age that prizes novelty, but there it is. The relentless march of artificial intelligence, you see, demands silicon, and TSM, with a nonchalance that borders on genius, provides it. It is a truth universally acknowledged, that a company in possession of a monopoly must be in want of more revenue.

The stock, having enjoyed a rather exuberant five-year ascent – a 170% increase, if one is inclined to keep score – projects a compound annual growth rate of 25% through 2029. A conservative estimate, naturally. One suspects modesty is merely a veil for absolute certainty. The AI market, after all, is predicted to swell to a rather vulgar $3.5 trillion by 2033. One almost feels sorry for the accountants.

Should TSM achieve even its self-imposed ambitions, a market capitalization nearing $3 trillion before 2030 appears… entirely plausible. Let us examine the mechanics of this potential fortune, shall we?

The Path to a Most Considerable Sum

Currently, a share in this silicon empire commands approximately $365, backed by $121.48 billion in revenue and earnings per share of $10.55. The forward price-to-earnings ratio of 26.4 is, of course, merely a number. But a rather significant number, as it happens. One might say it’s the key to unlocking this particular treasure chest.

Assuming management’s 25% CAGR holds – and one rarely argues with those who control the means of production – revenue should nearly double to $237 billion by 2029. Maintaining current margins would elevate annual EPS to $20.61 – another doubling, and a rather satisfying symmetry. It is a testament to efficiency, or perhaps merely a consequence of having no serious competition.

Loading widget...

Applying that aforementioned P/E ratio of 26.4 to the projected EPS of $20.61 yields a share price of $543 by 2029. A 48% increase – hardly extravagant, but perfectly acceptable. This pushes the market capitalization just over $2.8 trillion. A sum large enough to make even the most jaded financier raise an eyebrow. And consider this: that’s a deliberately modest calculation, given the accelerating frenzy surrounding all things AI.

TSMC: The Unchallenged Artisan

TSMC does not design chips, you understand. That is left to the likes of Nvidia, Broadcom, and Advanced Micro Devices – companies with a flair for imagination, but a distinct lack of manufacturing prowess. TSMC creates them. It is the world’s leading foundry, producing over 10,000 products annually across a bewildering array of process technologies. A remarkable feat of engineering, and an even more remarkable display of control.

While high-performance semiconductors account for over half of its revenue, TSMC is also a major player in the smartphone, automotive, and Internet of Things sectors. Management reports a 48% growth rate for high-performance computing chips in 2025 – a figure that suggests they are not merely keeping pace, but actively dictating the tempo.

TSMC’s unique position as the indispensable manufacturer for a multitude of companies, all currently experiencing unprecedented demand, makes it an exceptionally attractive investment as the AI boom continues. One maintains that TSMC may be the most astute investment available today, and it seems destined to challenge, if not surpass, the $3 trillion barrier before 2030. It is, after all, a company that understands the art of making something out of nothing – a talent that is, sadly, becoming increasingly rare.

Read More

2026-02-19 22:32