The semiconductor industry is one of most important in the world.
Virtually all modern technology relies on semiconductors in some way shape or form, from the device you’re reading this on to the most sophisticated supercomputers in the world.
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »
Semiconductors are the reason the iPhone in your pocket has millions of times the computational horsepower in it than NASA had when it put men on the moon.
And the majority of these chips, about 60% of the world’s supply, are produced in Taiwan by a single company, Taiwan Semiconductor Manufacturing (NYSE: TSM).
That company is also the reason 90% of the most advanced semiconductor chips are also made in Taiwan.
In all, Taiwan Semiconductor has a near-monopoly in the semiconductor market. It controls 72% of the pure foundry market as of the end of Q3 2025. Its nearest competitor is Samsung (OTC: SSNL.F) with a paltry 7% market share.
But the reason it flies under the radar is the fact that Taiwan Semiconductor is a pure foundry company. It doesn’t design any of the chips it produces. All it does is provide the raw manufacturing base needed by the companies that do design chips.
And the company’s list of clients includes every major chip designer in the world.
Taiwan Semiconductor’s two biggest customers are Apple and Nvidia.
However, it also produces chips for Advanced Micro Devices, Broadcom, Intel, Qualcomm, and many more.
So, if it just produces chips, how does it have such a stranglehold on the market? Couldn’t those chip designers go to someone else or, better yet, build their own manufacturing base?
They could, but semiconductor factories are incredibly expensive. The extreme ultraviolet (EUV) lithography machines needed to make advanced semiconductors cost almost half a billion dollars per unit.
It initially cost Taiwan Semiconductor $12 billion to build its factory in Arizona. That investment has since swelled to $165 billion to expand that one factory to three.
By comparison, Intel, looking to claw back some market share from Taiwan Semiconductor is looking to spend $100 billion in Ohio to build its own manufacturing center. But that project has repeatedly been delayed and the first plant at the complex is now not scheduled to be completed until 2030.
By that time, Taiwan Semiconductor’s Arizona expansion should be just about complete with production in factory No. 2 slated for 2028 and No. 3 by the end of the decade.
