Taiwan Semiconductor Manufacturing Company (TSMC) is projected to experience significant revenue growth, with estimates suggesting an annual increase of 21% from 2023 to 2026, potentially reaching $164 billion by 2028.

Earnings-per-share (EPS) forecasts indicate substantial growth for TSMC, with projections of $6.37 for 2024, $8.12 for 2025, and $9.82 for 2026.

In the second quarter of 2024, TSMC reported a revenue of $20.8 billion, marking a remarkable 33% year-over-year increase, and anticipates reaching $86.4 billion in total revenue for the year.

The semiconductor market's slow growth has been linked to downturns in the smartphone and personal computer sectors.

Future growth in the semiconductor industry is expected to be driven by artificial intelligence (AI), which is projected to significantly increase chip spending across various sectors.

TSMC plays a crucial role in the AI sector as the leading contract chip manufacturer, fabricating chips for major tech companies like Nvidia, Microsoft, Apple, and AMD.

Analysts predict continued strong growth for TSMC over the next five years, reinforcing its position as a smart investment choice.

The analysts forecast that TSMC will maintain a gross margin above 55% in 2025, potentially nearing 60% between 2028 and 2030, supported by its AI semiconductor customers.

TSMC has finalized its 2025 wafer price hikes, with increases of 10% for AI semiconductors, 6% for high-performance computing, and 3% for smartphone and consumer products.

The recent decline in TSMC's stock price has been partially attributed to comments from former President Donald Trump regarding Taiwan's defense funding, presenting a potential buying opportunity.

The market for AI chips is expected to grow at an impressive rate of 38% per year over the next decade, driven by significant investments in AI technologies.