TLDR

Taiwan Semiconductor Manufacturing (TSMC) manufactures chips for major AI companies including Nvidia, AMD, and Broadcom
The company reported 41% year-over-year revenue growth in Q3 2025 with a 46% profit margin
TSMC is launching 2nm chip technology this quarter, offering 25-30% better energy efficiency than current 3nm chips
The stock trades at 23 times forward 2026 earnings with analysts projecting 20% revenue growth
Applied Digital reported 84% revenue growth and has an $11 billion contracted lease pipeline over 15 years

Taiwan Semiconductor Manufacturing has emerged as a key player in the artificial intelligence infrastructure buildout. The company manufactures microchips for nearly all major AI hardware providers.

TSMC reported third quarter revenue growth of 41% year over year measured in US dollars. The company achieved a profit margin of 46% for the quarter.

Taiwan Semiconductor Manufacturing Company Limited, TSM

The Taiwanese chip manufacturer serves customers including Nvidia, Advanced Micro Devices, Broadcom, Tesla, and Apple. These companies rely on TSMC because they do not manufacture their own chips.

TSMC updated its 2025 revenue growth forecast to the mid-30% range. The company previously expected growth of around 30% for the year.

Market research firm Gartner estimates AI chip sales could exceed $476 billion in 2025. This represents an increase from $279 billion in 2024.

New Chip Technology Launches

TSMC is entering production of 2nm chips this quarter. The current standard for advanced chips is 3nm technology.

The new 2nm chips consume 25% to 30% less power than 3nm chips at the same speed. Energy consumption has become a focus area for AI data center operators.

The technology upgrade could drive customers to design new computing hardware. Data center operators may purchase the new chips for higher computing capacity with lower energy use.

TSMC trades at 23 times projected 2026 earnings. Wall Street analysts expect the company to achieve 20% revenue growth in 2026.

Data Center Demand Growth

McKinsey estimates $5.2 trillion will be spent on AI data centers through 2030. Approximately $3 trillion of that investment will go toward semiconductors and computing hardware.

Applied Digital operates in the AI data center space. The company reported 84% year-over-year revenue growth to $64.2 million in its most recent quarter.

Applied Digital Corporation, APLD

Applied Digital has $11 billion in contracted lease revenue for its first data center campus in North Dakota. The contracts span 15 years.

Goldman Sachs projects data center demand could grow 50% by 2027 to 92 gigawatts. Applied Digital has a development pipeline of 4 gigawatts for AI-specific data centers.

TSMC stock has risen from a 52-week low of $134.25 to recent trading near $301. The company maintains a 58% gross margin.

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Filed under: News - @ October 29, 2025 11:27 am