TSMC Powers AI: Chip Giant's Future Looks Bright

Taiwan Semiconductor Manufacturing (TSMC) has established itself as the linchpin of the global artificial intelligence infrastructure, with its state-of-the-art chip manufacturing capabilities essential for next-generation AI accelerators and high-performance chips. The company's robust performance was underscored in its fiscal 2025 third quarter, where revenue climbed 40.8% year over year to $33.1 billion. Advanced process technologies, particularly 7-nanometer and below, now constitute a significant majority of its wafer revenue, with high-performance computing emerging as its strongest end market.

Looking ahead, TSMC is aggressively advancing its chip manufacturing roadmap. Volume production for its N2 (2-nanometer) technology is slated to commence by late 2025, followed by the N2P variant in the latter half of 2026. Additionally, A16 technology, optimized for high-performance computing, will also enter volume production in the second half of 2026. The company anticipates that N2 technology will achieve superior profitability compared to its predecessor, N3.

To address the escalating demand, TSMC is substantially increasing its advanced chip packaging capacity. A considerable portion of its substantial fiscal 2025 capital expenditure is dedicated to packaging expansion and testing. Furthermore, TSMC's recent success in producing the first U.S.-made Nvidia Blackwell wafer at its Arizona facility validates its domestic manufacturing capabilities and may strengthen its relationships with U.S. clients seeking localized chip production.