Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) sits at the center of the artificial intelligence supply chain, making it one of the most important companies behind the industry’s rapid expansion, according to Futurum Equities chief market strategist Shay Boloor.
Why Boloor Calls TSMC The AI Industry’s ‘Physical Chokepoint’
In a post on X on Wednesday, Boloor argued that TSMC offers one of the clearest ways for investors to gain exposure to the AI boom because many of the world’s leading chip designers rely on the same advanced manufacturing partner.
He pointed to companies including Nvidia Corp (NASDAQ:NVDA), Advanced Micro Devices, Inc. (NASDAQ:AMD), Apple Inc. (NASDAQ:AAPL), Broadcom, Inc. (NASDAQ:AVGO) and Qualcomm Inc. (NASDAQ:QCOM), along with hyperscalers developing custom silicon, saying they all depend on TSMC’s leading-edge manufacturing capabilities.
“The real bottleneck is who has access to scarce wafer starts,” Boloor wrote, adding that TSMC remains the “physical chokepoint” behind nearly every major AI chip.
He also noted that while the company’s advanced N3 production is reportedly expanding to around 220,000 wafers per month, a true “second source” with comparable capabilities still does not exist.
Read Also: Why TSMC Is Jacking Up 2nm Production By 70% To Power The AI Future
Why TSMC’s Manufacturing Edge Matters
In an accompanying video, Boloor described TSMC as “the AI factory” or manufacturing layer of the AI economy.
While companies such as Nvidia and AMD design cutting-edge processors, he said TSMC possesses the scale, manufacturing yields, advanced packaging technology and production discipline needed to turn those designs into chips at commercial volumes.
“You can have the best chip design in the world, but if you cannot manufacture it at scale with high yields and reliable supply, the product doesn’t matter at all,” he said.
Boloor added that TSMC’s manufacturing network powers AI accelerators, networking chips, custom silicon and advanced packaging technologies, concluding that “every token ultimately pays an invisible royalty to TSMC” because so much of the AI ecosystem depends on its chipmaking capacity.
$TSM is one of the cleanest ways to own the AI buildout because $NVDA, $AMD, $AAPL, $AVGO, $QCOM and hyperscaler custom silicon programs all depend on the same leading-edge manufacturing layer.
— Shay Boloor (@StockSavvyShay) July 8, 2026
The real bottleneck is who has access to scarce wafer starts and TSMC remains the… pic.twitter.com/XxNMHJueoS
TSMC Earnings Due July 16
A key near-term catalyst for TSMC is its earnings report, scheduled for July 16.
Wall Street expects the chipmaker to report earnings of $3.77 per share, up from $2.47 a year ago, while revenue is projected to increase to $39.76 billion from $30.07 billion. Analysts remain broadly bullish on the stock.
According to Benzinga Pro, TSMC has a consensus price target of $434.38 based on ratings from eight analysts.
The latest three price targets—from BofA Securities, Susquehanna and Barclays—average $545, implying a potential upside of 24.37% from the stock’s current price.
Price Action: TSMC shares closed 1.02% higher at $436.98 on Wednesday and gained another 1.12% to $441.88 in premarket trading Thursday.
According to Benzinga Edge Rankings, TSMC scores in the 97th percentile for Quality and has posted positive returns across its short, medium and long-term price trends.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Shutterstock
