How can a company’s boom actually get stronger while supposedly faltering? That’s the puzzle with TSMC, the world’s largest contract chipmaker, whose AI success story keeps getting better despite claims it’s losing steam.
TSMC expects AI-related chip revenue to double in 2025. That’s like a pizza shop selling twice as many pizzas as last year—hardly what you’d call “faltering.” The company projects AI chip sales will grow at a mid-40% annual rate over the next five years, meaning this boom has serious staying power through 2029.
Doubling AI chip revenue while projecting mid-40% growth through 2029 sounds more like acceleration than decline.
The numbers tell a different story than the doom-and-gloom headlines. TSMC forecasts 2025 sales growth of nearly 35% in U.S. dollar terms, exceeding their July estimate of 30%. Third-quarter net profit hit a record NT$452.30 billion, which translates to about $14.78 billion. These aren’t the numbers of a company losing its edge.
What’s driving this growth? Surging global demand for artificial intelligence applications from data centers, cloud computing, and AI hardware. Major tech clients keep placing large orders for advanced AI chips, and this demand spans multiple regions worldwide rather than being concentrated in one area. The weaker NT$ is projected to boost gross margins, providing additional tailwinds for profitability.
TSMC’s technology leadership remains rock-solid. Their 3nm process accounted for 23% of third-quarter shipments, while 5nm captured 37%. These advanced nodes are essential for AI chip production, and competitors still struggle to match TSMC’s scale and process maturity.
The company is betting big on continued growth by raising their 2025 capital expenditure forecast to $40-42 billion. They’re allocating 70% of this investment to advanced process development, showing confidence in long-term AI demand. Meanwhile, TSMC’s $165 billion investment in North Phoenix demonstrates their commitment to expanding U.S. manufacturing capabilities. For investors considering exposure to this growth, diversification across technology stocks and other sectors can help manage the inherent risks in any single company’s performance.
Sure, there are risks. U.S. tariff policies could impact demand for consumer products, and overseas facilities like their Arizona plant face short-term profitability challenges. However, these concerns pale compared to TSMC’s dominant market position and technological advantages.
When a company doubles its AI revenue while breaking profit records, calling it a “faltering boom” seems like looking at a sunny day and complaining about clouds. TSMC’s AI story appears far from over.
