TSMC becomes first Asian company to reach $1T as AI demand surges

Taiwan Semiconductor Manufacturing Company Limited, more commonly known as TSMC, became the first Asian firm to reach a market capitalization of more than a trillion dollars as it briefly surpassed Berkshire Hathaway on June 20 to become the eight most valuable company in the world. 

The company’s quiet rise comes on the wings of its massive portfolio of tech and manufacturing giants who source its semiconductors.

Apple and the gang

TSMC is the world’s largest semiconductor manufacturer. Its top customers include Apple, AMD, Intel, Nvidia, Intel, and Qualcomm. However, Apple is by far its largest client, thanks to the use of TSMC semiconductors in iPhones, accounting for around a fifth of its total revenue.

Essentially, TSMC enjoys a mostly solitary spot atop the market due to its massive fabrication capabilities. Global competitors including AMD, Intel, and Nvidia even use it as a fabricator for some of their chips

TSMC also has a firm grip on cryptocurrency mining. Its semiconductors are used in the lion’s share of miners including the world’s most popular Bitmain Antminer models.

In China, 98% of the rigs used to mine Bitcoin are made by Bitmain and feature TSMC semiconductors. Samsung has also used the company’s chips to build out its mining business as well.

Retreat and beyond

As of the time of this article’s publication, TSMC has retreated from its early-day high of over a trillion dollars in market capitalization to a more modest $859.69 billion. This puts it back behind Berkshire Hathaway and currently occupying the number nine spot on the global leaderboards ahead of Eli Lilly and Tesla.

Discounting Nvidia, currently sitting at third with a market capitalization of $2.9 trillion, the next highest chip maker on the list beyond TSMC is Broadcom — another chipmaker that outsources fabrication to TSMC — in 12th place with a market capitalization of $732.4 billion.

While there’s no predicting the market or how various businesses will perform, TSMC’s unique position allows it to reap the benefits of its competitor’s windfalls. Its destiny is intertwined with both Apple and Nvidia, for example, and as demand goes up for products such as the iPhone and Nvidia’s GPUs, so does the need for more semiconductors.

Assuming growth rates continue in the artificial intelligence sector, and TSMC continues to meet the demand for new chips, TSMC could become the first Asian company to dethrone Meta (formerly Facebook) and officially enter the big tech zone atop the list of world’s most valuable companies.

Related: Nvidia claims breakthrough on path to GPU-based quantum computing