TSMC: The Market Is Punishing The Wrong AI Stock (NYSE:TSM) - Seeking Alpha

This article analyzes Taiwan Semiconductor Manufacturing Company's (TSMC) exceptional Q2 performance, highlighting revenue of $40.2 billion and a gross margin of 67.7%, along with strong Q3 guidance. ... Read original →

TSMC’s Q2 results—$40.2B revenue and 67.7% gross margin—reveal structural strength, not speculative froth. Its 3nm node is fully absorbed by NVIDIA and other AI chip leaders, triggering a cascade upgrade across EDA, advanced packaging, and materials supply chains. While U.S. CHIPS Act subsidies ease capex burdens, the geographic concentration of leading-edge fabs in Taiwan, China remains a systemic vulnerability, accelerating customer-driven supply diversification. Samsung Foundry’s price-led aggression and Intel IFS’s 18A bet lack TSMC’s yield maturity and scale, preserving its pricing power. Over the next 18 months, as AI infrastructure spending shifts from hype-driven spikes to sustained deployment, TSMC’s long-term customer agreements and projected 56–58% operating margins position it to capture the lion’s share of rationalized AI investment.