TSMC’s Aggressive Expansion Amid AI Chip Boom Highlights Valuation Opportunity
Taiwan Semiconductor Manufacturing Company (TSMC) delivered a robust fourth-quarter performance, with revenue surging 26% year-over-year. The chipmaker's guidance points to even stronger growth ahead, projecting a 30% revenue jump by 2026 and a 25% compound annual growth rate through 2029. These forecasts underscore TSMC's pivotal role in the AI hardware ecosystem, supplying critical components for tech giants like Nvidia and Apple.
Despite its dominant market position and growth trajectory, TSMC trades at a discount to peers—24 times forward earnings compared to the 30x multiples of big tech companies. This valuation gap emerges as the company commits $165 billion to expand its Phoenix manufacturing facilities, while Taiwan pledges $250 billion toward US semiconductor production under a new trade deal.
