AI Boom sends TSMC, the world’s most important chip maker, to 60 spots on the global 500
Taiwanese semiconductor manufacturers are undoubtedly one of the world It’s the most important Company. And it will become its top corporate executive, a slightly modest CC Wei, one of the most important people in the business world.
Wey won center stage in March. Let’s announce An additional $100 billion investment in TSMC’s Arizona business. Way I met After meeting Trump, Taiwan’s President Rai Qingte.
“If 10 years ago someone told me that in a week that they would meet two presidents and discuss their investments of hundreds of millions of dollars, they would have thought they were kidding,” CEO CC Wei said. luck In written comments.
this year Global 500, luck’With annual rankings of the world’s biggest companies making revenue, TSMC rose to 60th place, reaching 126th in the Global 500 this year after earnings reached over $90 billion in 2024.
It is also the 13th most profitable company in this year’s rankings, earning $36 billion in profits, ahead of Bank of America, ExxonMobil and Toyota. TSMC is also one of two non-Western companies, along with Saudi Aramco, with market value above $1 trillion.
TSMC participated in the Global 500 in 2015 and appeared on No. 472. Since then, it has steadily risen its rankings and surpassed US rival Intel in 2023.
The AI boom is set to further drive TSMC. TSMC revenues last quarter rose It reached $30.1 billion by more than 40% compared to the previous year. 60% of sales came from the high-performance computing sector, including AI and 5G applications.
“TSMC’s upcoming outlook is particularly strong, spurring robust AI demand and sustained capital expenditures from cloud service providers,” said William Li, senior analyst at Counterpoint Research.
TSMC Chief Financial Officer Wendell Huang says he hopes AI will continue to accelerate the company’s business with a combined annual growth rate of 40% medium-term range over the next five years.
Huang also pays attention to the increasing use of AI by consumers and businesses, but he is also interested in the relatively new development, “Sovereign AI.”
Today, many governments are seeking more national management of the entire AI technology stack, including datasets, data centers, AI models, and applications. The goal is to promote dependence on the current AI leaders, the US and China, and to promote local development. Increased investment in local facilities will drive demand for AI chips like Nvidia’s GPUs and promote sales of chip manufacturers like TSMC.
Why is TSMC becoming a market leader?
Analysts point to TSMC’s dominance in cutting-edge technology, its ability to deliver high-performance chips, and its close connections with key clients such as Nvidia and Apple for its success.
However, Huang believes that TSMC’s success is due to something more fundamental. The company is purely a contract chip maker and has no unique products. This means you cannot compete with your customers and will not compete with them.
Takes two of TSMC’s closest competitors: Samsung Electronics and Intel. In addition to manufacturing chips, both companies also sell their own devices. Samsung sells smartphones, while Intel sells computers and other personal computers. This could compete with what potential customers are selling as well.
Huang added that TSMC could work with customers years ago to enable chip makers to invest and innovate in manufacturing products that are suitable for their customers.
Geopolitics and Global Expansion
However, the importance of TSMC and its headquarters in Taiwan Island means that chipmakers are one of the few companies whose decision-making has geopolitical results.
“The growing strategic importance of TSMC means it cannot be avoided being affected by the US-China technology competition,” said Galen Zeng, senior research manager for semiconductor research at IDC Asia/Pacific.
In US export control measures, TSMC refused to export its most sophisticated chips to China. The company has also stopped exporting chips to Huawei, which has been on Washington’s trade blacklist since 2020. However, late last year, the US began researching how TSMC manufactured products entered the device from Huawei. After TSMC Condemned Customers secretly pouring chips into Huawei.
Still, TSMC could benefit from a brief suspension in the US-China technology dispute after Washington allows companies like NVIDIA to start selling some of their major AI processors again to China. “It’s very positive news for them and in return it’s very positive news for TSMC,” Wei I said Shareholder a few weeks ago.
TSMC currently has most plants in Taiwan. There are two in mainland China, and new foundries have been opened in Arizona, USA and Japan Island. TSMC is currently building a new factory in Germany.
Chipmaker consistently states that overseas foundries are directly addressing the needs of their customers.
In his email, Wei said many customers told him how “important” these overseas factories were. He said he doesn’t consider himself a “geopolitics expert” and added that he is proud “in line with delivering what his clients need.”
Wei also recalled how founder Morris Chang reminded executives to “jump the hoops” for clients. And he has achieved humble status as TSMC continues to continue the global ranking of the world’s biggest companies by revenue.
“It’s a great encouragement to go up to the Fortune Global 500,” he writes.