How to Trade TSMC (TSM)

At age 56, Morris Chang was invited by the Taiwanese government to establish a semiconductor industry after 25 years at Texas Instruments. Chang proposed the 'pure-play foundry' concept—manufacturing chips for others without competing in design. Most major chip companies declined to invest; only Philips agreed. The Taiwanese government funded 48%, and TSMC was established on February 21, 1987.

TSMC IPO'd on the Taiwan Stock Exchange in 1994 and became the first Taiwanese company to list on the New York Stock Exchange in 1997. This provided international investors access and gave TSMC capital for massive expansion. Since 1994, TSMC has maintained a revenue CAGR of 17.4%.

Apple began seeking a new chipmaker to replace Samsung (which had started competing with Apple in smartphones). In 2010, they initiated a partnership, and mass production of A-series chips with TSMC began in 2011. Today, Apple is TSMC's largest customer, accounting for 25%+ of its annual revenue.

TSMC launched mass production of 7nm in 2018 (for Apple's A12), 5nm in 2020 (Apple A14 and AMD Ryzen 7000), and 3nm in 2022. It became the only manufacturer in the world capable of producing these leading-edge chips at commercial volumes.

The AI boom caused demand for TSMC to skyrocket. All NVIDIA H100/H200/B100 GPUs are manufactured by TSMC. Its market cap touched $1.5 trillion in 2025. The company is diversifying its geopolitical risk by building fabs in Arizona (Fab 21, $65B investment), Japan, and Germany.