To The Moon

Business and Financial Performance

TSMC's financial health is robust, driven by its technological leadership. The company has seen a significant shift in its revenue streams, with High-Performance Computing (HPC), primarily for AI applications, now surpassing smartphones as its largest source of income. This trend is expected to continue, with TSMC's management projecting AI-related revenue to double in 2025 alone and grow at a compound annual growth rate (CAGR) in the mid-40% range until 2029.

The company's advanced manufacturing processes are key to its success. Its 3nm and 5nm nodes now account for a massive 60% of total revenue, with strong demand from major clients like Apple and NVIDIA. This technological edge has helped TSMC achieve a record-high global market share of over 70% in the foundry business. Recent financial reports show revenue continuing to climb, with a notable 33% increase in August compared to the previous year.

The 5-Year Strategic Plan (2025-2030)

TSMC's strategy for the next five years is multifaceted, aiming to expand capacity, diversify its global footprint, and maintain its technological lead.

1. Technological Advancement

TSMC's core strategy is to stay ahead of the curve. The company's 2nm process is on track for mass production in the second half of this year, with major clients like MediaTek already adopting the technology for their next-generation chips. This process, using nanosheet transistor technology, will offer significant improvements in performance and energy efficiency. Looking further ahead, TSMC is also developing its 1.6nm technology for introduction in 2026.

2. Global Expansion and Diversification

To address geopolitical risks and customer demands for a more resilient supply chain, TSMC is heavily investing outside of Taiwan. Its global expansion plans include:

United States: A massive investment of up to $165 billion in three new fabrication plants and two advanced packaging facilities in Phoenix, Arizona.

Japan: An established presence in Kumamoto, with plans for further expansion.

Germany: Construction on its first European plant in Dresden, Germany, with a $10 billion investment to produce mature technology nodes for the automotive industry.

These investments aim to reduce geographical concentration and serve key markets directly, with the US projected to hold over 20% of global advanced chip capacity by 2030, a share driven largely by TSMC's efforts.

3. Sustainability and ESG Goals

TSMC has a clear roadmap to net-zero emissions across its value chain by 2050, with interim goals to gradually reduce emissions by 2030. This includes initiatives to improve energy efficiency, use renewable energy, and work with suppliers to reduce their carbon footprint.

TSMC is not just an under-the-radar player; it's a keystone of the tech industry. Its ability to execute on its ambitious five-year plan will not only determine its own future growth but also shape the trajectory of AI, cloud computing, and consumer electronics worldwide.

You can watch a video about the TSMC Arizona Fab to see the company's US expansion efforts.

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