Taiwan Semiconductor (TSM) Stock: Chip Giant Projects Explosive Growth Through 2029

TLDR

• TSMC posted 26% Q4 revenue growth and forecasts 30% expansion in 2026
• Company expects 25% annual growth rate through 2029 driven by AI chip demand
• Stock valued at 24 times forward earnings versus 30x for major tech companies
• Phoenix manufacturing expansion includes $165 billion investment in new facilities
• Taiwan commits $250 billion to US semiconductor production under new trade agreement

Taiwan Semiconductor Manufacturing posted strong quarterly results and issued bullish guidance that highlights ongoing AI infrastructure expansion. The chip foundry’s projections point to years of sustained growth ahead.

Taiwan Semiconductor Manufacturing Company Limited, TSM

TSMC reported 26% revenue growth in the fourth quarter compared to the prior year. Management expects that momentum to accelerate in 2026 with projected revenue gains of 30%.

The growth story extends well beyond next year. The company forecasts a 25% compound annual growth rate from 2024 through 2029. That level of expansion is rare for a business valued at $1.7 trillion.

TSMC manufactures chips for nearly every major AI hardware producer. The company supplies critical logic chips to Nvidia, Apple, and other tech giants building AI systems. When demand for computing power surges, TSMC benefits directly.

Valuation Looks Attractive Despite Recent Gains

The stock jumped over 50% in 2025, yet the current valuation suggests room for further appreciation. TSMC trades at 24 times forward earnings while delivering growth that rivals typically pay 30 times earnings to access.

Big tech companies command premium valuations but none project 30% revenue growth this year. The S&P 500 trades at 22.3 times forward earnings with far slower growth expectations.

The disconnect between TSMC’s growth trajectory and its price multiple creates an opportunity. Investors can buy into a company with clear expansion catalysts at a discount to comparable businesses.

US Manufacturing Push Gains Momentum

TSMC is building multiple production facilities in Phoenix with a total investment of $165 billion. The project represents one of the largest manufacturing investments in American history.

Taiwan’s president recently met with Arizona Senator Ruben Gallego to discuss expanding operations further. The conversation focused on adding more manufacturing and research facilities in the Phoenix region.

The meeting followed a new trade deal between Taiwan and the United States. American tariffs on Taiwan exports fell from 20% to 15% under the agreement.

Taiwan pledged $250 billion for semiconductor, energy, and AI production investments in America. An additional $250 billion in credit will support future projects.

Senator Gallego described the current investment level as impressive and said other states wish they had similar commitments. President Trump has encouraged chipmakers to expand domestic production, particularly for AI applications.

The Phoenix facilities will produce cutting-edge chips essential for artificial intelligence development. Construction is already underway on multiple manufacturing plants that will create thousands of jobs.

TSMC’s expansion plans align with growing demand for advanced semiconductors. The company’s central role in AI chip production positions it to capture value as the industry scales.

The foundry’s five-year growth outlook reflects confidence in sustained AI spending. With revenue expected to grow 30% this year and a 25% annual rate through 2029, TSMC offers investors exposure to the chip industry’s strongest growth driver while trading below typical tech valuations.

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