To The Moon

This week, the global chip industry felt like it was on a roller coaster.

Dutch lithography giant $ASML Holding NV(ASML)$ reported disappointing results as customer orders fell short of expectations, hitting a three-year low.

As market is wondering if the AI-driven chip boom had finally come to an end, $Taiwan Semiconductor Manufacturing(TSM)$ exceeded all expectations and rekindled the market’s optimism.

TSMC’s revenue grew by 39% year-on-year, net profit surged by 54%, and its gross profit margin reached a record high. The market’s anxiety instantly flipped into euphoria, with TSMC’s stock soaring over 12% at one point, and its market cap breaking the $1 trillion mark.

Advance process technology and extreme production capacity and efficiency.

This latest surge in TSMC’s stock price is based on its dominant performance in advanced process technology.

TSMC’s 3nm and 5nm processes contributed over half of its revenue.

TSMC pursues extreme production capacity and efficiency, driving rapid process advancements. Through internal competition (such as the "Night Hawk Plan"), they accelerate technological progress. This high-pressure foundry culture keeps TSMC at the forefront of the industry.

Seize the trend and strong AI demand.

Behind this achievement is TSMC’s close collaboration with its customers, especially leading AI chip companies like NVIDIA, AMD, and Qualcomm.

In contrast, ASML, though a leader in lithography equipment, is starting to show limitations in its customer base. Both Samsung and $Intel(INTC)$ have fallen behind in the AI chip race, with the former missing out on advanced process technology and the latter losing opportunities in mobile internet and AI’s emerging fields.

Besides R&D, How did TSMC grow into a towering tree?

TSMC’s growth trajectory can be traced back 40 years to Taiwan’s Industrial Technology Research Institute.

At the time, Morris Chang was invited to return to Taiwan from the United States, where he planted the seed of TSMC, which gradually grew into a towering tree.

Philips' technology transfer helped lay the foundation, but TSMC’s true success came from Chang's strategic vision and commitment to technological investment.

TSMC’s success is far from accidental. The market has propelled it to the top, and its technological prowess ensures it stays firmly rooted there. The industry is ever-changing, but TSMC’s advanced process technology and extreme manufacturing culture have allowed it to stand out in the competition.

As its market cap crossed the $1 trillion mark, TSMC’s story is far from over.