Taiwan Semiconductor Manufacturing Company has told investors it expects the global semiconductor market to reach $1.5 trillion by 2030, with more than half of that spending directed at high-performance chips, the category that includes the processors powering artificial intelligence infrastructure.
The forecast, delivered alongside upgraded full-year guidance, offers the clearest picture yet of how the company at the centre of the global chip supply chain sees demand evolving over the rest of the decade, and how aggressively it intends to invest to capture it.
TSMC now expects revenue growth to exceed 30% for 2026, up from a long-term target of 25% annualised growth from 2024 through 2029 that itself would have been considered extraordinary for a company of its scale.
Capital spending for the current year is expected to come in near the top of a $52 billion to $56 billion range, and the company said the next three years will see "significantly larger" increases, language that implies annual capital expenditure could approach or exceed $70 billion before the end of the decade.
The numbers reflect a structural shift in who is driving semiconductor demand. For decades, the largest chip buyers were consumer electronics companies, smartphone makers and personal computer manufacturers.
Today, the dominant customers are cloud hyperscalers, Amazon, Google, Microsoft and Meta, whose combined capital expenditure budgets for 2026 exceed $700 billion, nearly all of it directed at AI infrastructure that runs on TSMC-fabricated processors.
TSMC's competitive position is difficult to overstate. The company manufactures the most advanced chips for Nvidia, AMD, Apple, Qualcomm and Broadcom, as well as the custom silicon designed by Amazon, Google and Microsoft for their own data centres. It claims to have more manufacturing capacity for the world's most advanced process nodes than every other chipmaker combined, a statement that effectively describes a monopoly on the production technology that the entire AI industry depends on.
That dominance extends to advanced packaging, the increasingly critical process of stacking and connecting multiple chips into a single module.
Nvidia's Blackwell and forthcoming Vera Rubin processors, AMD's MI400 series and Apple's M-series chips all rely on TSMC's CoWoS (chip-on-wafer-on-substrate) packaging technology, which has been in chronic shortage for the past two years.
The investment thesis is straightforward: TSMC sits at the only chokepoint through which virtually all AI hardware must pass.
Analysts expect earnings per share to more than double between 2025 and 2028, yet the stock trades at less than 27 times forward earnings, a multiple that looks modest compared with the premium commanded by many of its customers and competitors. Intel, by contrast, trades at more than 100 times earnings expectations while operating at a fraction of TSMC's manufacturing capability.
The risks are equally well documented. TSMC's concentration in Taiwan exposes it to geopolitical tensions between the United States and China. Its factories in Arizona, which began volume production last year, partially mitigate that risk but account for only a small fraction of total capacity.
A disruption to TSMC's Taiwanese operations, whether from conflict, natural disaster or trade restrictions, would paralyse the global technology industry.
The company's willingness to spend at the high end of its guidance range and signal even larger increases ahead suggests it sees no near-term ceiling on AI-driven demand.
If its $1.5 trillion market forecast proves correct, and if high-performance chips take the 55% share TSMC expects, the addressable market for advanced fabrication alone would exceed $800 billion by 2030, roughly four times the current level.
Related reading
- Taiwan Semiconductor signals stronger AI chip demand
- Google unveils two new AI chips at Cloud Next as hyperscaler hardware race intensifies
- Google in talks with Marvell to develop two new AI chips as it builds multi-supplier TPU strategy
For the AI infrastructure boom to sustain its current trajectory, every dollar of capital expenditure announced by every hyperscaler must eventually flow through a fabrication facility.
TSMC operates the vast majority of those facilities, and its guidance suggests it intends to keep it that way.
The recap
- Taiwan Semiconductor forecasts a $1.5 trillion semiconductor market by 2030
- 55% or $825 billion of spending to target high-performance chips
- Company expects capex near high end of $52-$56 billion
