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Taiwan Semiconductor Manufacturing Co.
Information Technology · Semiconductors
Structural: monopoly on leading-edge logic - every AI accelerator ($NVDA Blackwell/Rubin, $AMD MI300/MI350, $AAPL M-series, $AVGO custom ASICs, $GOOGL TPU, $AMZN Trainium) fabs at TSM. Samsung Foundry yield issues and Intel Foundry restructuring leave TSM as the only credible N3/N2 supplier through 2027+.
CoWoS packaging capacity is the gating constraint on AI compute supply industry-wide.
- AI HPC ~25%+ of revenue mix, secular ramp through Rubin/MI400 generation
- N2 ramps 2026, A16 backside-power 2026-2027 - pricing power persists
- CoWoS capacity 2x by end-2026, doubles again 2027 - every additional wafer is pre-sold
- Arizona Fab 21 (N4) producing, Fab 2 (N3) 2028, Fab 3 (N2) 2030 - de-risks geopolitical tail
- Gross margin 58-60% structurally despite N3 dilution and overseas fab drag
- Taiwan Strait geopolitical tail risk - single point of failure for global compute
- Capex intensity $40B+/yr; ROIC compresses if AI demand pauses
- Arizona and Japan fabs run 3-5pp below Taiwan gross margin
- China exposure (~9% rev) under continued US export controls
- N2 capex front-loaded; if hyperscaler ASIC migration slows, utilization gap