Taiwan Semiconductor Manufacturing Company (TSMC) remains the linchpin of global AI infrastructure, producing nearly all leading-edge GPUs and ASICs used in AI data centers. In collaboration with Nvidia and Broadcom, TSMC has ramped capacity to meet surging demand, and its 2-nanometer process node has delivered yield rates above internal targets. The company’s pricing power is evident in planned price increases over the next four years, with 2nm wafers commanding roughly 50% higher fees than the prior 3nm generation. This has underpinned TSMC’s ability to invest heavily in advanced packaging and capacity, reinforcing its technological moat.

In the third quarter, FengHe Fund Management Pte. Ltd. boosted its position in TSMC by 253.5%, acquiring an additional 253,800 shares to reach 353,900 shares, representing 9.0% of its portfolio and valued at approximately $98.84 million. Other hedge funds and institutional investors have also increased or initiated stakes, contributing to a total institutional ownership of 16.51%. This influx of strategic capital underscores Wall Street’s conviction in TSMC’s long-term growth trajectory driven by AI and high-performance computing demand.

TSMC reported fourth-quarter revenue of T$1,046.08 billion, a 20% year-on-year increase, reflecting strong orders from major hyperscalers. Gross margin held near historical highs at 57.8%, and the company’s Q4 shipments of advanced nodes reached a record share of total wafer sales. Looking ahead, memory inflation—driven by high-bandwidth memory demand—could push DRAM prices up by as much as 55%–60% and NAND by 33%–38% in the first quarter. While this supports foundry revenue, elevated smartphone component costs (smartphones accounted for roughly 30% of Q3 revenue) pose a potential headwind if handset volumes moderate.