Indispensable for NVIDIA and Co.: Why TSMC shares could become the big winner of the next AI era

• AI growth is limited by physical chip and packaging capacity
• TSMC, as a critical infrastructure player, controls key technologies
• Power is shifting from software companies to semiconductors

According to the Wall Street Journal, more and more analysts and industry strategists are assuming that it will no longer only be the developers of intelligent models who will be at the forefront of the coming AI era, but above all the companies that control the physical infrastructure of these systems. The Taiwanese semiconductor company Taiwan Semiconductor Manufacturing (TSMC) is particularly in the spotlight.

The assumption that companies like TSMC are likely to become the real winners of the AI ​​arms race is based on simple logic: modern AI requires enormous amounts of specialized computing power. While the first generation of generative AI was primarily characterized by the training of gigantic models, the focus is now increasingly shifting towards permanent inference. AI agents, multimodal systems, real-time translation, autonomous industrial applications and personalized models are generating a permanently increasing need for high-performance computing. This means that not only is the demand for chips growing, but especially for highly complex manufacturing and packaging technologies – and TSMC is right at this critical point in the global value chain.

The real bottleneck of the AI ​​economy

Just a few years ago, the production of the most modern chips was considered the biggest bottleneck in the semiconductor industry. According to “TrendForce”, this bottleneck is now shifting to another area: so-called advanced packaging. This refers to technologies with which various chip components – such as graphics processors and high-performance memory – are connected to one another in an extremely dense design.

Particularly crucial is TSMC’s CoWoS technology (“Chip-on-Wafer-on-Substrate”), which is now considered a key component of modern AI systems. Without this packaging technology, many modern AI accelerators would be virtually impossible to build. This affects, among other things, the systems from NVIDIA, whose Blackwell architecture is considered the basis of numerous upcoming AI data centers. But companies like AMD, Broadcom and QUALCOMM are also increasingly dependent on TSMC’s packaging ecosystem.

In this context, the industry analysts from “TrendForce” point out that the demand for CoWoS capacities is currently growing significantly faster than the available production options. The result is a remarkable shift in power: it is no longer just the chip design that determines success in the AI ​​age, but the ability to produce these designs on an industrial scale on a large scale.

From contract manufacturer to strategic infrastructure group

For decades, TSMC was primarily considered a classic contract manufacturer (“foundry”) for other technology companies. However, this image falls short today. The next generation of AI hardware no longer consists of individual chips, but of highly integrated system architectures.

TSMC is gradually developing from a manufacturing service provider into a kind of infrastructure platform for artificial intelligence. In addition to access to the most modern semiconductor structures in the 3-nanometer and, in the future, 2-nanometer range, the company now also controls central technologies such as SoIC (“System on Integrated Chips”), InFO (“Integrated Fan-Out”) and CoWoS. According to “TrendForce”, this is a decisive competitive advantage over competitors such as Samsung Electronics or Intel, which continue to struggle with challenges in yield rates and scaling. This has led to a “single-supplier dynamic” dominated by TSMC.

The new scarcity in the AI ​​age

For decades in the technology industry, software was considered to be almost infinitely scalable. However, AI fundamentally changes this dynamic. Because modern AI models not only require enormous amounts of electricity, but also highly specialized physical hardware. This is exactly what creates a new form of strategic scarcity. According to reports from TrendForce, major cloud and AI companies are now reserving production capacity years in advance. At the same time, modern packaging solutions remain in short supply despite massive investments. The tech analysis and consulting company is already describing the development as a kind of “supply chain arms race” within the AI ​​industry.

For TSMC, this represents an exceptionally strong market position. The more AI becomes the basic technology of the global economy, the more valuable the companies that control access to this infrastructure become.

Why investors are increasingly looking at TSMC

The actual investment thesis surrounding TSMC is therefore based less on classic semiconductor cycles and more on a long-term macroeconomic shift. Many investors no longer see artificial intelligence as a mere software trend, but as future infrastructure – comparable to electricity, telecommunications or cloud computing. If this view is confirmed, computing power would become a permanently scarce resource – and the companies that would benefit most would not necessarily be those that develop the most visible AI applications, but those that provide the technological basis.

The current analyst landscape therefore remains overwhelmingly positive for TSMC: several large houses such as Barclays and Bank of America have set high price targets for the TSMC ADR, primarily pointing to the ongoing shortage of advanced manufacturing capacity as well as the rapidly increasing demand in the area of ​​AI and high-performance computing chips. According to “TipRanks”, the average price target is $465.00 – and thus signals an upside potential of 18.45 percent compared to the ADR’s last closing price on the NYSE of $392.57 (as of May 19, 2026).

According to Reuters, TSMC itself increased its forecast for the global semiconductor market in May and now believes that it could reach a volume of more than $1.5 trillion by 2030 (previously $1 trillion), driven largely by artificial intelligence and high-performance computing. According to TSMC, demand for wafers for AI accelerators is expected to grow elevenfold in the period from 2022 to 2026, and the compound annual growth rate (CAGR) of capacities for the company’s CoWoS packaging technology is predicted to be more than 80 percent for the period from 2022 to 2027.

If all of this actually comes true, the real winner of the AI ​​revolution may not be in Silicon Valley, but in the clean rooms of Taiwanese chip factories.

Carolin Ludwig, editorial team at finanzen.net

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