TSMC Market Cap Crosses $2 Trillion

The surge in valuation reflects a fundamental shift in TSMC's revenue streams. High-Performance Computing (HPC), driven by soaring AI chip demand from clients like Nvidia, now accounts for 57% of revenue, overtaking smartphones (30%) as the primary sales driver. This transition highlights the industry's pivot from mobile-first to AI-centric hardware. Advanced process nodes are the core of this growth, with 3nm and 5nm technologies now generating 60% of the company's wafer revenue. However, profitability follows a different curve; these newer nodes, while representing 52% of revenue, only contribute 27% of operating profit due to the high depreciation costs of cutting-edge equipment. Older, fully depreciated nodes remain highly profitable. The Arizona project is a cornerstone of this strategy, expanding from an initial $12 billion plan to a $165 billion "gigafab" commitment. This massive undertaking, one of the largest foreign direct investments in U.S. history, will ultimately include six fabrication plants, two advanced packaging facilities, and a dedicated R&D center. Apple serves as a strategic anchor for the Arizona investment, committing to purchase over 100 million chips from the facility this year. This guaranteed demand provides TSMC with the financial confidence to ramp up a new fab, while allowing Apple to onshore a piece of its silicon supply chain and mitigate geopolitical risks. The first Arizona fab began producing 4-nanometer chips in late 2024. The second fab is slated for 3nm process technology with volume production targeted for 2028, and a third fab will follow with 2nm and more advanced processes by the end of the decade. This domestic expansion is backed by significant government support, including $6.6 billion in direct funding from the U.S. CHIPS and Science Act. The collaboration aims to re-establish American leadership in advanced semiconductor manufacturing for critical technologies like AI, 5G/6G, and data center applications.