Taiwan Semiconductor (TSM)

Leading-edge foundry (TSMC) — the sole volume manufacturer of advanced AI silicon + CoWoS packaging

AI exposure 31% — derived from reported segment revenue, not asserted.

Where it sits

Silicon Layer → Foundry Services · figures rebased to Q2 2026, reported 2026-07-16

Leading-edge foundry for AI accelerators, data-center CPUs/GPUs… leads 3 businesses in this sub-tier that together are 100% of revenue, so Foundry Services is effectively the whole company rather than one leg of it.

Reported segments

High Performance Computing (HPC) — 66% of revenue
Smartphone — 22% of revenue
IoT + Automotive + DCE — 12% of revenue

TSMC (~$90B FY2025; FY2026 growth guided slightly above +40%) — world's leading pure-play foundry. By platform: HPC ~66% of revenue (Q2 2026, +20% QoQ — AI/data-center; manufactures NVDA/AMD/AAPL/hyperscaler chips, CoWoS advanced packaging = AI-critical bottleneck, primary; 2nm first revenue in Q2) + Smartphone ~22% + IoT/Auto/DCE ~12% (est. residuals). Primary B1 Foundry Services. The indispensable AI-chip manufacturer; customers NVDA/AMD/AAPL/AVGO/etc; supplied by ASML/AMAT/LRCX/KLAC.

How the 31% is built

High Performance Computing (HPC) — 66% of revenue × 45% AI-driven (estimate). Mgmt's last quantification was AI accelerators ~high-teens% of FY2025 revenue; asked for an updated AI CAGR on the Q2 2026 call C.C. Wei answered 'not a number, but it's stronger and stronger'. HPC went 51% -> 66% of revenue (+20% QoQ) on a base up ~40%, implying AI-accelerator revenue roughly doubled YoY to…
Smartphone — 22% of revenue × 5% AI-driven (estimate). Estimate — TSMC does not break out edge-AI silicon; on-device NPU area is a small slice of mobile SoC wafer value and smartphone fell 4% QoQ, i.e. it is not an AI-driven line
IoT + Automotive + DCE — 12% of revenue × 5% AI-driven (estimate). Estimate — IoT 5% / Auto 4% / DCE 1% of Q2 2026 revenue; marginal AI content, no company quantification

Investment read

Moat. Process-technology lead (2-3nm) + CoWoS advanced-packaging monopoly. The only foundry that can make leading-edge AI silicon at volume. Years ahead of Samsung/Intel.

Bottleneck / pricing power. The hardest bottleneck in the stack — CoWoS packaging capacity literally gates how many AI accelerators exist. Everyone (NVDA/AMD/AVGO/hyperscalers) waits in line.

Role in the AI stack. The manufacturing keystone — converts designs into physical AI silicon; no viable substitute at leading edge.

Connected companies

ASML Holding (ASML) — TSM is supplied by: EUV/DUV lithography systems
Lam Research (LRCX) — TSM is supplied by: etch & deposition
Applied Materials (AMAT) — TSM is supplied by: deposition/CMP/ion implant
KLA Corporation (KLAC) — TSM is supplied by: process control / inspection
Teradyne (TER) — TSM is supplied by: ATE test systems
NVIDIA (NVDA) — TSM supplies: leading-edge wafer fab (GPUs)
Advanced Micro Devices (AMD) — TSM supplies: wafer fab (CPU/GPU)
Broadcom (AVGO) — TSM supplies: wafer fab (ASICs)
Marvell Technology (MRVL) — TSM supplies: wafer fab (custom silicon)
Qualcomm (QCOM) — TSM supplies: wafer fab (mobile SoC)
Monolithic Power Systems (MPWR) — TSM supplies: foundry wafers for power-management ICs (fab-lite model)
Analog Devices (ADI) — TSM supplies: foundry capacity for leading-edge analog/mixed-signal
Amkor Technology (AMKR) — TSM supplies: foundry wafers flow to Amkor for assembly/packaging
Qorvo (QRVO) — TSM supplies: foundry for select RF/CMOS content (plus in-house GaAs/GaN)

Others in Foundry Services

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