The Motley Fool·2026-02-16 08:02Core Viewpoint - Taiwan Semiconductor Manufacturing Company (TSMC) is positioned to potentially join the $3 trillion market cap club, driven by its leadership in advanced semiconductor manufacturing and strong financial performance [2][3]. Company Overview - TSMC is the world's largest semiconductor foundry with a market capitalization of $1.9 trillion, holding a 71% share of the global chip market and producing over 90% of the most advanced semiconductors [5][9]. - The company has transitioned from generating most of its revenue from smartphone chips to advanced chips for AI, data centers, and high-performance computing, which now account for 55% of its sales [6]. Financial Performance - In Q4, TSMC reported revenue of $33.7 billion, a 26% year-over-year increase, and earnings per American Depository share of $3.14, up 35% [7]. - The gross margin improved to 59.9%, up 380 basis points, and the operating margin increased to 50.8%, up 510 basis points, indicating enhanced operational leverage [8]. - The company forecasts Q1 revenue of $35.2 billion, representing a 38% year-over-year growth [8]. Market Position and Future Outlook - Analysts project TSMC's revenue to reach $157.8 billion by 2026, with expectations of $193.9 billion and $232.8 billion in 2027 and 2028, respectively, positioning the company for a potential $3 trillion market cap by 2029 [10][11]. - The demand for high-end semiconductors is expected to grow, with annual sales projected to approach $1 trillion by 2026, benefiting TSMC as a leading provider [12].