TSMC’s Strategic Resurgence: Founder’s Return Amid AI Dominance and US Expansion

The semiconductor industry witnessed a significant moment recently as Morris Chang, the 95-year-old founder of Taiwan Semiconductor Manufacturing Company (TSMC), made his first public appearance in over a year. Notably, he was accompanied by Jensen Huang, the CEO of Nvidia. This re-emergence coincides with a pivotal period for the chipmaking giant, which is channeling $165 billion into new manufacturing facilities in the United States while solidifying its commanding position in the artificial intelligence chip sector.

Recent financial results underscore TSMC's formidable strength. For the fourth quarter of 2025, the company reported revenue of $33.70 billion, marking an 11.5% year-over-year increase. Net profit surged by 26.4% to $16.29 billion, reflecting a robust profit margin of 48.4%. The firm's market capitalization now stands at an impressive $1.77 trillion. Investors are keenly awaiting the Q1 2026 results, scheduled for release on April 15, which will indicate whether TSMC can sustain its momentum amid soaring AI chip demand and how its substantial U.S. investments are impacting profitability.

Unrivaled Control of the AI Chip Supply Chain

The scale of TSMC's market dominance is staggering. According to a current Counterpoint Research study, the company manufactures nearly 99% of all wafers for the top ten providers of AI server chips and ASICs. Whether it's custom silicon developed by Google, Meta, or Microsoft, or the leading-edge GPUs from Nvidia, almost all ultimately flow through TSMC's production lines.

Should investors sell immediately? Or is it worth buying TSMC?

A particularly lucrative advantage is TSMC's advanced packaging technology, which involves stacking multiple chips to enhance performance. This capability allows the corporation to command higher margins. Analysts at Goldman Sachs note that Google's TPU chips, for instance, achieve up to 70% lower cost per token compared to previous generations—a powerful incentive for hyperscale data center operators.

Geopolitical Context and Strategic Timing

Chang founded TSMC in 1987 and built it into the world's most critical chip fabrication enterprise. His public return is strategically timed, occurring as new investment agreements between the U.S. and Taiwan are being finalized and potential tariff reductions on Taiwanese goods appear on the horizon. TSMC currently controls approximately 70% of the global foundry market, with no other contract manufacturer coming close.

The company's planned U.S. expansion highlights a delicate geopolitical balancing act. The investment aims to reduce the concentration of advanced production in Taiwan, thereby mitigating supply chain risks, without compromising TSMC's technological leadership and market supremacy.