Taiwan Semiconductor Controls 72% of the World Chip Market, and the Inventory May Surge in 2026

The semiconductor business is certainly one of most essential on this planet.

Just about all trendy know-how depends on semiconductors not directly form or kind, from the system you are studying this on to essentially the most subtle supercomputers on this planet.

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Semiconductors are the explanation the iPhone in your pocket has thousands and thousands of instances the computational horsepower in it than NASA had when it put males on the moon.

And the vast majority of these chips, about 60% of the world’s provide, are produced in Taiwan by a single firm, Taiwan Semiconductor Manufacturing (NYSE: TSM).

That firm can be the explanation 90% of essentially the most superior semiconductor chips are additionally made in Taiwan.

In all, Taiwan Semiconductor has a near-monopoly within the semiconductor market. It controls 72% of the pure foundry market as of the top of Q3 2025. Its nearest competitor is Samsung (OTC: SSNL.F) with a paltry 7% market share.

However the cause it flies beneath the radar is the truth that Taiwan Semiconductor is a pure foundry firm. It does not design any of the chips it produces. All it does is present the uncooked manufacturing base wanted by the businesses that do design chips.

And the corporate’s record of shoppers consists of each main chip designer on this planet.

Taiwan Semiconductor’s two largest clients are Apple and Nvidia.

Nonetheless, it additionally produces chips for Superior Micro Units, Broadcom, Intel, Qualcomm, and plenty of extra.

So, if it simply produces chips, how does it have such a stranglehold available on the market? Could not these chip designers go to another person or, higher but, construct their very own manufacturing base?

They may, however semiconductor factories are extremely costly. The intense ultraviolet (EUV) lithography machines wanted to make superior semiconductors price virtually half a billion {dollars} per unit.

It initially price Taiwan Semiconductor $12 billion to construct its manufacturing facility in Arizona. That funding has since swelled to $165 billion to broaden that one manufacturing facility to a few.

By comparability, Intel, seeking to claw again some market share from Taiwan Semiconductor is seeking to spend $100 billion in Ohio to construct its personal manufacturing heart. However that challenge has repeatedly been delayed and the primary plant on the advanced is no longer scheduled to be accomplished till 2030.

By that point, Taiwan Semiconductor’s Arizona growth needs to be nearly full with manufacturing in manufacturing facility No. 2 slated for 2028 and No. 3 by the top of the last decade.

So, to say the corporate has a powerful moat defending its dominance could be one thing of an understatement. No person is constructing as much as Taiwan Semiconductor’s manufacturing capabilities simply.

And having a near-monopoly on an business as important as semiconductors is about as profitable as you’d assume.

Taiwan Semiconductor generated $122.4 billion in income for 2025, up 35.9% over 2024 and its diluted earnings per share (EPS) for the yr grew 46.4%.

Plus, regardless of how costly it’s to construct and preserve semiconductor factories, the corporate has a internet revenue margin of 45%.

That progress is ready to proceed as nicely. The corporate tasks 2026 income will enhance 30% over 2025 and anticipates a income compound annual progress price (CAGR) of 25% by way of 2029.

Taiwan Semiconductor is sitting fairly because the king of the semiconductor business and its reign appears to be like like it will likely be a protracted one.

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James Hires has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Superior Micro Units, Apple, Intel, Nvidia, Qualcomm, and Taiwan Semiconductor Manufacturing and is brief shares of Apple. The Motley Idiot recommends Broadcom. The Motley Idiot has a disclosure coverage.

Taiwan Semiconductor Controls 72% of the World Chip Market, and the Inventory May Surge in 2026 was initially printed by The Motley Idiot