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TSMC Dominates Foundry Market with 72.5% Share

By Stocks Desk · 2026-09-20 · 2 min read
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TSMC captured 72.5% of global foundry revenue in Q2, driven by a 66% revenue contribution from high-performance computing.

Taiwan Semiconductor Manufacturing (NYSE: TSM) reported that high-performance computing, which includes artificial intelligence workloads, generated 66% of its total revenue in the second quarter. This segment has overtaken smartphones as the primary revenue driver, reflecting a structural shift in demand toward advanced logic chips required for AI infrastructure.

According to data cited by GN stocks/chips, global chip foundry revenue exceeded $50 billion during the period. TSMC accounted for approximately 72.5% of this total, while the second-largest competitor captured only 5.9%. The disparity indicates that no rival possesses sufficient manufacturing capacity to challenge TSMC’s current market position in the near term.

Competitive Capacity Gap Limits Rival Growth

The primary barrier to entry for competitors is the capital expenditure required to build production facilities capable of matching TSMC’s output. The cost of constructing new fabs with comparable yield rates and process nodes creates a significant economic moat. This structural advantage protects TSMC from market share erosion, as rivals cannot quickly replicate the scale of its manufacturing base.

While Apple remains a historic client, the company’s revenue mix has diversified heavily toward AI customers. The concentration in high-powered computing means that TSMC’s performance is now tightly linked to the pace of global AI data center construction rather than consumer device cycles.

Valuation Remains Below Recent Historical Peaks

TSMC currently trades at approximately 25.4 times forward earnings. This multiple is lower than the peak valuation of roughly 29 times forward earnings observed at the end of 2024 and 2025. The current pricing suggests that the stock has not fully priced in the sustained demand for advanced semiconductor manufacturing.

Market forecasts project 35% revenue growth for the upcoming fiscal year. Analysts anticipate that the AI build-out will continue through the end of the decade, providing a multi-year runway for revenue expansion without immediate threat from competitive displacement.

Long-Term Demand Supports Structural Growth

The investment case for TSMC relies on the necessity of advanced chips for future computing tasks. By serving a broad range of clients across AI and non-AI sectors, the company mitigates the risk associated with dependence on a single customer. The combination of high market share and projected revenue growth underpins the stock’s potential to outperform broader market indices.

Based on reporting by yahoo.com, compiled by the Tradingbird desk.

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