TAIPEI, May 27, 2026, 19:06 TST
TSMC’s role in the AI supply chain is back in focus after Nvidia CEO Jensen Huang said Wednesday that the company could spend up to $150 billion a year in Taiwan. Nvidia’s annual spending there was about $10 billion to $15 billion some four or five years back, and now stands near $100 billion, Huang said. “Going to 150 billion dollars” each year, Huang told reporters, tying Nvidia even more closely to Taiwanese manufacturers. Reuters
Taiwan’s stock market has passed India’s in market value, pushed mainly by Taiwan Semiconductor Manufacturing Co. TSMC makes up 42% of the island’s main index. Taiwan’s total market cap hit $4.95 trillion Monday, more than India’s $4.92 trillion, according to Bloomberg numbers reported by The Business Times.
Taiwan’s stock market isn’t the broad play it used to be. Exposure now leans hard on one company and the AI hardware cycle. “Taiwan’s rising market capitalisation is fundamentally a reflection of its heavy concentration in tech hardware, which is currently at the centre of the AI investment cycle,” Franklin Templeton fund manager Yi Ping Liao said. Taipei Times
Simple enough for investors, but it’s not without risk. Nvidia, AMD and Broadcom all jockey in the GPU and custom AI chip market, but what they share is a need for high-end manufacturing—TSMC is the foundry making much of that happen. GPUs—graphics processing units—run and train AI models. ASICs are custom chips made for one customer or use.
TSMC holds 72% of the pure-play foundry market and makes almost all—about 99%—of AI ASICs for major hyperscalers and clients, according to Seeking Alpha contributor Juxtaposed Ideas this week. The analyst reiterated a Buy, though pointed to possible margin pressure from TSMC’s push overseas.
TSMC reported that revenue climbed 17.5% in April from last year, hitting NT$410.73 billion. Revenue for January to April came in at NT$1.54 trillion, up 29.9%.
TSMC posted first-quarter revenue of $35.9 billion and a gross margin of 66.2%, topping its earlier forecast. For the second quarter, the chipmaker is looking for revenue between $39.0 billion and $40.2 billion with gross margin expected in a 65.5% to 67.5% range.
Nvidia is moving forward with plans for a Taiwan headquarters. CEO Jensen Huang said the new site will begin construction this year, aiming to start operations in 2030, with about 4,000 staff. The new base will give Nvidia a physical tie to TSMC, Foxconn, Wistron and Quanta—key suppliers for AI servers and infrastructure.
AMD is pushing ahead too. The company said last week it plans to spend more than $10 billion in Taiwan’s AI sector to build out partnerships and boost advanced packaging, which lets chips work together more efficiently for AI. “By combining AMD leadership in high-performance computing with the Taiwan ecosystem and our strategic global partners, we are enabling integrated, rack-scale AI infrastructure,” CEO Lisa Su said. AMD
The trade still comes with risk. Huawei on Monday said it targets making chips with transistor density at the 1.4-nanometre level by 2031 but didn’t provide independent performance figures. Omdia’s He Hui described it as “a shift from traditional node-driven scaling to system-level efficiency scaling.” Counterpoint Research analyst Brady Wang added, “cost, power, heat, and system integration remain major challenges.” Reuters
Simply Wall St called it concentration risk, saying much of Taiwan’s $4.95 trillion market value is tied to TSMC. That means index exposure in Taiwan often just means more TSMC risk. The site also flagged Huawei’s effort to shift away from TSMC-like manufacturing as a check on how strong TSMC’s lead really is.
Right now, the market isn’t trading TSMC like a regular chip name. Investors are seeing it as a toll road for the AI boom. The key question is if this toll road will stay scarce and keep its pricing, margins and money flowing the same way.
