Taiwan Semiconductor Manufacturing Company (TSMC) is currently navigating a complex landscape shaped by strong year-end export figures from Taiwan, coupled with challenges related to its expansion plans in Arizona. The recent data released by Taiwan’s Ministry of Economic Affairs revealed a remarkable 39.5% year-over-year increase in export orders, totaling $72.92 billion, primarily driven by demand for artificial intelligence (AI) and high-performance computing (HPC) semiconductors. This surge is promising for TSMC, affirming that infrastructure development for key clients like Nvidia and AMD is not only ongoing but accelerating.
In addition to the robust export performance, market research indicates that TSMC claimed a record 72% share of the global foundry market in the third quarter of 2025, reinforcing its dominant position in the AI accelerator segment, particularly in advanced process nodes of 5 nanometers or smaller. This strategic advantage allows TSMC to play a vital role in the burgeoning AI market.
Despite these encouraging signs, TSMC faces significant operational hurdles, particularly concerning its U.S. expansion. A report from the New York Times highlighted delays in permitting and a shortage of skilled labor at the Arizona site, leading to a substantial increase in project costs. This situation has raised concerns regarding the economic feasibility of the politically motivated push to reshore chip production.
Further complicating TSMC’s position is the company’s stringent “N-2” rule, which restricts access to its most advanced manufacturing technologies. While this policy aims to protect TSMC’s technological edge, it inadvertently benefits competitors like Samsung, which could capitalize on U.S. clients’ potential preference for onshore production.
Financially, TSMC’s stock reflects a mixture of optimism and caution, currently trading about 27% higher year-to-date and nearing a 52-week high, amid prevailing concerns over long-term geopolitical risks and operational costs. Notably, analysts from firms such as Susquehanna are bullish on TSMC, with price targets being raised in response to anticipated annual AI demand growth of around 40%.
Looking ahead, critical milestones are on the horizon. In January, TSMC will provide its capital expenditure outlook for 2026, which will be pivotal in assessing whether the Arizona project’s cost overruns will impact future investments. Additionally, the expected rollout of TSMC’s 2-nanometer process technology in late 2025 or early 2026 could solidify its leadership in the AI domain, with possibilities for a positive reassessment of its share price.
Overall, while TSMC contends with considerable challenges, its strong export figures and dominance in the AI chip market present a hopeful outlook for sustained growth and technological leadership in a rapidly evolving industry.