TSMC: The Quiet Giant Powering AI in Asia

TL;DR:

• TSMC becomes the first Asian company to reach a $1T market capitalization due to surging AI demand.
• The company’s success is driven by its massive portfolio of tech and manufacturing giants, including Apple and Nvidia.
• TSMC’s dominance in semiconductor manufacturing positions it to benefit from the growth of AI and potentially dethrone Meta as one of the world’s most valuable companies.

The Rise of a Quiet Giant

Taiwan Semiconductor Manufacturing Company Limited (TSMC) made history on June 20 by becoming the first Asian firm to achieve a market capitalization of over a trillion dollars. This milestone briefly propelled TSMC past Berkshire Hathaway, making it the eighth most valuable company globally. The company’s rise has been driven by its extensive portfolio of tech and manufacturing clients who rely on its semiconductors.

Apple and Other Tech Giants

As the world’s largest semiconductor manufacturer, TSMC boasts an impressive clientele, including Apple, AMD, Intel, Nvidia, and Qualcomm. Apple is TSMC’s most significant customer, with around a fifth of its total revenue coming from the iPhone maker. TSMC’s unparalleled fabrication capabilities have placed it at the top of the market, with competitors such as AMD, Intel, and Nvidia even using TSMC as a fabricator for some of their chips.

A Stronghold in Cryptocurrency Mining

TSMC’s semiconductors are also dominant in the cryptocurrency mining industry. The lion’s share of miners, including the popular Bitmain Antminer models, use TSMC semiconductors. In China, 98% of the rigs used to mine Bitcoin are made by Bitmain and feature TSMC chips. Samsung has also turned to TSMC’s chips to expand its mining business.

A Temporary Retreat and Future Prospects

At the time of writing, TSMC’s market capitalization has retreated to a more modest $859.69 billion, placing it behind Berkshire Hathaway and just ahead of Eli Lilly and Tesla. However, TSMC remains the most valuable chipmaker, with Broadcom trailing in 12th place at $732.4 billion.

TSMC’s unique position allows it to capitalize on its competitors’ successes. As the demand for products like iPhones and Nvidia’s GPUs grows, so does the need for more semiconductors. If the artificial intelligence sector continues to expand and TSMC meets the demand for new chips, it could potentially dethrone Meta (formerly Facebook) and join the ranks of the world’s most valuable companies.

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• To learn more about TSMC tap here.