Taiwan unveils $510 billion push to become global AI leader
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jul 23 2025
0mins
Source: SeekingAlpha
Taiwan's Economic Initiative: Taiwan has announced a $510 billion plan to enhance its economy through the "Ten Major AI Infrastructure Projects," aiming to establish itself as a global leader in artificial intelligence by 2040, focusing on technologies like silicon photonics, quantum technology, and AI robotics.
Support for AI Development: The initiative includes raising over $3.08 billion in venture capital, creating 500,000 new jobs, and forming alliances such as the Taiwan AI Robotics Industry Grand Alliance to foster local development and innovation in AI.
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Analyst Views on TSM
Wall Street analysts forecast TSM stock price to fall
8 Analyst Rating
7 Buy
1 Hold
0 Sell
Strong Buy
Current: 368.100
Low
63.24
Averages
313.46
High
390.00
Current: 368.100
Low
63.24
Averages
313.46
High
390.00
About TSM
Taiwan Semiconductor Manufacturing Co Ltd is a Taiwan-based integrated circuit foundry service provider. The Company is primarily engaged in integrated circuit manufacturing services. It offers advanced process technologies, specialised process solutions, advanced photomask and silicon stacking, and packaging-related technologies, while supporting a comprehensive design ecosystem. The Company's products serve diverse electronic sectors including artificial intelligence, high-performance computing, wired and wireless communications, automotive and industrial equipment, personal computing, information applications, consumer electronics, smart internet of things, and wearable devices.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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See More
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- Market Dominance: TSMC controls 99% of the foundry market for AI server compute and custom AI processors, positioning itself as a critical technology enabler for emerging AI giants like Anthropic, thereby solidifying its leadership in the semiconductor industry.
- Revenue Growth Momentum: In 2025, TSMC achieved a 36% revenue increase to $122.4 billion, with January 2026 revenue growing nearly 37% year-over-year, indicating potential to exceed its 30% growth target and boosting investor confidence.
- AI Chip Market Outlook: RBC Capital Markets projects AI chip sales to rise from $220 billion last year to over $550 billion by 2028, placing TSMC in a prime position to capitalize on this lucrative market as the preferred foundry for AI chip designs.
- Investment Appeal: TSMC's forward earnings multiple of 26 aligns closely with the Nasdaq-100 index, and its earnings are expected to grow faster than the broader market, suggesting that investors are unlikely to go wrong with this semiconductor giant.
See More
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- Nvidia's Market Leadership: As a leading designer of AI processors, Nvidia is poised to benefit from the increasing spending on AI data center infrastructure, particularly as Alphabet and Meta ramp up capital expenditures to $185 billion and $135 billion respectively, driving demand for Nvidia's processors.
- Alphabet's Gemini Success: Alphabet's Gemini chatbot now boasts 750 million monthly active users, a 67% increase from nine months ago, and has secured a partnership with Apple to make Gemini the underlying AI model for an upcoming version of Siri, which is expected to generate billions in revenue for Alphabet.
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- Long-Term Competitive Advantage: Research from Morningstar indicates that TSMC's organic growth driven by major tech trends could last for decades, with management confidently forecasting a 30% increase in sales this year, further solidifying its market position.
See More
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- Alphabet's AI Success: Alphabet's Gemini chatbot has reached 750 million monthly active users, a 67% increase in nine months, and its collaboration with Apple to integrate Gemini into Siri is expected to generate billions in revenue, further boosting its cloud computing growth.
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- Optimistic Industry Outlook: All three companies excel in the AI sector, with reasonable P/E ratios of 47, 30, and 34 for Nvidia, Alphabet, and TSMC respectively, suggesting that investors can expect substantial returns over the coming years.
See More
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- Market Share Advantage: TSMC holds a 99% share in AI server compute and custom AI processor manufacturing, making it a crucial enabler for emerging AI giants like Anthropic, thereby solidifying its leadership in the semiconductor industry.
- Significant Revenue Growth: In 2025, TSMC's revenue surged by 36% to $122.4 billion, with January 2026 revenue growing nearly 37% year-over-year, indicating potential to exceed its 30% growth target and boosting investor confidence.
- AI Chip Market Outlook: RBC Capital Markets projects AI chip sales to rise from $220 billion last year to over $550 billion by 2028, positioning TSMC as the foundry of choice for AI chip designs, ready to capitalize on this lucrative market opportunity.
- Enhanced Investment Value: TSMC's forward earnings multiple of 26 aligns with the Nasdaq-100 index, and its earnings growth is expected to outpace the broader market, suggesting that investors will not be disappointed with this semiconductor giant.
See More
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- Cryptocurrency Market Decline: The overall cryptocurrency market has fallen over 45% since reaching a high of $4.28 trillion on October 6, 2025, primarily driven by Bitcoin's price drop and institutional ETF withdrawals, highlighting the market's heavy reliance on sentiment and liquidity.
- Alphabet's Strong Earnings: Alphabet reported $113.8 billion in revenue for Q4, an 18% year-over-year increase, with net income of $34.45 billion, up nearly 30%, although the market reacted cautiously to its $185 billion AI infrastructure spending, the rapid growth of its cloud computing division indicates strong business potential.
- TSMC's Market Share Growth: Taiwan Semiconductor Manufacturing increased its market share from 66% to 72% in Q3, with Q4 revenue reaching $33.73 billion, a 25.5% year-over-year increase, and guidance for even better revenue in Q1, showcasing its leadership and robust growth prospects in the semiconductor industry.
- Oracle's Cloud Computing Growth: Oracle generated $7.97 billion in revenue in Q2 of fiscal 2026, a 34% increase year-over-year, with cloud computing becoming its largest revenue driver; despite over $100 billion in debt, its growth potential remains significant compared to the risks associated with cryptocurrencies.
See More
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- Surging NAND Prices: The surge in demand for high-performance solid-state drives in AI data centers has led to a significant increase in NAND prices, boosting Sandisk's sales and gross margins, which is expected to enhance its competitive position and solidify its market share.
- TSMC's Market Dominance: Taiwan Semiconductor Manufacturing (TSM), as the world's largest foundry, has a forward P/E of about 26 times, and despite trading near all-time highs, its central role in AI infrastructure makes it a valuable investment, with AI chip revenue projected to grow at over 50% annually through 2029.
- Strong Pricing Power: TSMC's near-monopoly in advanced chip manufacturing, characterized by high pricing power and low defect rates, positions it as a crucial partner for chip designers, ensuring continued benefits from the surging demand for AI chips in the future.
See More
