Taiwan Semiconductor Manufacturing Company (TSMC) (TSM) is a semiconductor foundry, which means it manufactures chips for other companies like Advanced Micro Devices, Inc. (AMD) and NVIDIA Corporation (NVDA) and 530 other companies. AMD and Nvidia, on the other hand, are fabless semiconductor companies that design and sell their own chips but outsource the manufacturing to foundry TSMC.
TSMC the Dominant Foundry
TSMC dominates the foundry business making chips with a 72.3% market share, and Table 1 shows how that position has developed over time.
The global semiconductor foundry industry expanded from $28.3 billion in 2010 to $169.5 billion in 2025. Over the same period, TSMC’s revenue increased from $13.3 billion to $122.5 billion.
What is particularly notable is how that growth has been distributed. While the industry has grown significantly, TSMC has captured the majority of that expansion. In 2025, the total market excluding TSMC was $47.0 billion, meaning TSMC alone now exceeds the combined revenue of all other foundry companies.
As demand for artificial intelligence infrastructure has accelerated, the key constraint has shifted from chip design to manufacturing capacity at advanced nodes. Chart 1 shows that TSMC dominates other foundries, particularly Samsung Electronics (SSNLF) at nodes to 5nm.
This reflects a structural shift in the industry. As semiconductor manufacturing has moved to more advanced process nodes, the number of companies capable of competing at the leading edge has narrowed. TSMC’s scale and execution at these nodes have allowed it to pull away from the rest of the industry.
Conversely, TSMC also makes chips at other nodes greater than 7nm, and these chips have lower manufacturing costs and these revenues dilute earnings. But leaders at those nodes include Chinese foundries Semiconductor Manufacturing International Corporation (SMIC) and HHGrace.
Chart 1: Foundry Share by Node
TSMC vs Nvidia At Data Center / High Performance Computing
In Chart 2, I plot TSMC’s HPC (High Performance Computing) vs. Nvidia’s Data Center revenues from Q1 2021 to Q1 2026. Data for TSMC are actual. To match the graph scale, I multiplied TSMC’s HPC revenues in NT$bn by a constant factor. Nvidia’s revenues are in $ million.
Chart 2: TSMC HPC vs Nvidia Data Center Revenues
TSMC’s revenues reflect the timing of chip production and shipment, while Nvidia’s revenues reflect end-market demand. In Q2 2023, Nvidia’s data center revenues jumped 140%, marking the start significant demand as its H100 GPU began deployment in data centers. Between the H100 ramp in 2023 and the Rubin generation in 2026, Nvidia introduced the H200 in late 2023, and the Blackwell-based B100/B200 platform, announced Q1 2024, and ramping through 2024–2025.
AMD Data Center Positioning
In Chart 3, I add AMD’s Data Center revenues for the same period.
AMD continues to see a mixed environment as AI deployments expand while cloud customers optimize data center compute and enterprise customers remain cautious with new deployments. Against this backdrop, AMD continues to position AI as a key growth driver, increasing its investment in AI-related R&D and infrastructure.
Between Q1 2023 and 2026, AMD introduced the MI300A/MI300X platform in late 2023 and began ramping deployments through 2024–2025, but clearly without the same scale or acceleration demonstrated by Nvidia’s data center growth.
Chart 3: TSMC HPC vs Nvidia vs AMD Data Center Revenues
TSMC Revenue Trends
Chart 4 shows TSMC revenues and ASPs between Q1 2018 and Q1 2026. It is important to recognize in Chart 4 that the ASPs are not only correlated with price increases, but also with product mix, as smaller node wafers are priced higher. Over time, a greater portion of TSMC’s wafer revenue has shifted toward advanced process nodes, which has driven ASP expansion.
In recent periods, a significant share of TSMC’s wafer revenue has been generated by advanced nodes. Technologies at 7nm and below, including N7, N5, and N3, represented 74% of wafer revenues in Q1 2026, reflecting continued migration toward more complex and higher-value process technologies.
Overall, TSMC’s advanced technology nodes have become the primary driver of both revenue growth and ASP expansion, as demand for leading-edge manufacturing continues to increase, particularly in high-performance computing and artificial intelligence applications.
Chart 4: TSMC Total Revenues
Stock Performance and Market Positioning
Chart 5 shows share price performance for the past one-year period for TSM, NVDA, and AMD.
While Nvidia and AMD have shown strong share price performance, TSMC’s role in the AI ecosystem is different. Nvidia captures direct exposure to AI demand through its GPU products, while AMD participates as an emerging competitor. TSMC, by contrast, captures the manufacturing economics that enable both companies’ growth.
Chart 5: 1-year Share Price Performance TSM vs NVDA vs AMD
Investor Takeaway
TSMC is not simply a supplier to Nvidia and AMD. It is the manufacturing foundation that determines how much of the current AI demand cycle can be realized.
While fabless semiconductor companies capture direct exposure to AI growth, TSMC captures the underlying economics through advanced-node manufacturing, where supply remains constrained.
As AI workloads continue to drive demand for advanced processors, TSMC’s position in the semiconductor value chain remains central to that growth.
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