Taiwan Semiconductor Soars Past $1.6 Trillion As Big Tech Scrambles for Chip Capacity

Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) has emerged as the essential backbone of the global artificial intelligence economy, fueling a record-breaking rally that has pushed its market valuation beyond the $1.6 trillion mark, toppling the likes of Meta Platforms, Inc. (NASDAQ:META) and Broadcom Inc. (NASDAQ:AVGO).

As the sole manufacturer capable of producing the most advanced 3-nanometer (3nm) and 2-nanometer (2nm) chips, the company finds itself at the center of an intensifying hardware race between Nvidia Corp. (NASDAQ:NVDA) and Advanced Micro Devices, Inc. (NASDAQ:AMD).

This strategic dominance has led major financial institutions to reclassify the chipmaker not just as a manufacturer, but as the “strategic infrastructure” for the data-driven future.

Fueling Nvidia’s Six-Chip Revolution

The company’s primary growth catalyst arrived at CES 2026, where Nvidia CEO Jensen Huang announced that the revolutionary Vera Rubin platform is now in “full production” at Taiwan Semiconductor.

Unlike previous generations that updated only one or two components, Nvidia’s new strategy involves launching six concurrent chips, including the Vera CPU and Rubin GPU, all at once, the Taipei Times reported on Wednesday.

These processors rely on Taiwan Semiconductor’s advanced 3nm process to deliver a five-fold increase in AI performance while slashing energy costs by 90% compared to the prior Blackwell architecture.

By mastering this “extreme co-design,” Taiwan Semiconductor has enabled Nvidia to meet the needs of AI models that are currently growing ten times larger every year.

The Multi-Front Battle for Advanced Capacity

While Nvidia remains the company’s largest AI client, AMD is further straining Taiwan Semiconductor’s production lines with its own aggressive rollout.

AMD CEO Lisa Su recently unveiled the MI440X and MI455X accelerators, which utilize Taiwan Semiconductor’s world-class foundries to target the burgeoning enterprise and “on-premise” AI markets.

This dual-pronged demand from the industry’s two biggest players has created a severe supply-demand imbalance.

Analysts note that with production capacity for the upcoming 2nm node already largely reserved by Apple Inc. (NASDAQ:AAPL) and Nvidia, Taiwan Semiconductor possesses immense pricing power that will likely drive significant revenue growth through 2027.

Wall Street’s Thesis

Financial analysts have responded to this technological lead by aggressively hiking their price forecasts, viewing the company as a “multi-year growth engine.”

Goldman Sachs recently raised its price forecast for the stock by 35% to 2,330 New Taiwanese dollars, projecting that revenue will grow by 30% in 2026.

To maintain this lead, Taiwan Semiconductor plans to invest $150 billion in capital expenditures over the next three years.

Despite this, JPMorgan expects the firm’s operating margins to hit a three-year high of over 50%, Bloomberg reported on Wednesday.

TSM Price Action: Taiwan Semiconductor shares were down 1.33% at $323.08 during premarket trading on Wednesday. The stock is approaching its 52-week high of $333.08, according to Benzinga Pro data.

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