Why TSMC Is a Forever Hold for Long-Term Investors

In the rapidly evolving semiconductor industry, TSMC has solidified its position as the uncontested leader in advanced chip manufacturing. With a staggering 72% market share in Q3 2025, the Taiwanese foundry continues to outpace competitors like Samsung and Intel, driven by its dominance in cutting-edge nodes such as 3nm and 5nm. This strategic dominance, coupled with the explosive growth of AI, high-performance computing (HPC), and 5G, positions TSMC as a "forever hold" for long-term investors.

Technological Leadership: A Moat of Innovation

TSMC's technological edge is underscored by its superior yield rates. While Samsung's 2nm GAA process lags with a 40% yield, TSMC's 2nm node achieves 65%, a critical factor in maintaining cost efficiency and scalability. Intel, despite its 18A process advancements, still trails with a 55% yield, further cementing TSMC's leadership. The company's advanced packaging technologies, such as CoWoS and InFO, also play a pivotal role in enabling next-generation applications like generative AI and large language models according to market data. These innovations ensure TSMC remains the go-to partner for tech giants like Apple, which is expected to secure nearly half of the initial 2nm node output.

Secular Growth Drivers: AI, HPC, and 5G

The surge in AI demand has been a game-changer for TSMC. In Q3 2025, AI and HPC accounted for 57% of the company's total sales, with advanced nodes (3nm and 5nm) contributing 74% of wafer revenue. This trend is set to accelerate, as the global AI infrastructure market is projected to grow at a 30.4% CAGR, reaching $223.45 billion by 2030. The AI data center market, a subset of this ecosystem, is expected to expand even faster, with a CAGR of 31.6%, ballooning from $236.44 billion in 2025 to $933.76 billion by 2030.

TSMC's role in 5G infrastructure is equally pivotal. The company's 7nm and smaller chips, which represent 74% of its wafer revenue, are essential for 5G applications requiring high performance and efficiency. As the 5G infrastructure market is forecasted to grow at a 22.9% CAGR, expanding from $16.69 billion in 2023 to $95.88 billion by 2030, TSMC's advanced manufacturing processes will remain in high demand.

Strategic Expansion: Mitigating Risks, Capturing Growth

To meet surging demand and mitigate geopolitical risks, TSMC is aggressively expanding its global footprint. The company has invested heavily in U.S. facilities, including two major factories in Arizona, and is exploring expansion in Japan and Germany. This diversification not only aligns with U.S. policy incentives but also reduces exposure to U.S.-China trade tensions, ensuring long-term stability. Such strategic moves reinforce TSMC's ability to scale production while maintaining its technological edge.

Long-Term Projections: A Multi-Decade Tailwind

The secular growth drivers underpinning TSMC's success are not short-lived trends but structural shifts. The HPC market, projected to grow at a 7.2% CAGR, is expected to reach $87.31 billion by 2030. Meanwhile, the 5G infrastructure market's potential, with some forecasts predicting a 50.9% CAGR according to market research, underscores the enduring demand for TSMC's advanced manufacturing capabilities. These sectors are inextricably linked to TSMC's core competencies, ensuring its relevance as the digital economy evolves.

Conclusion: A Compounding Engine for Investors

For long-term investors, TSMC represents a rare combination of entrenched competitive advantages and exposure to multi-decade growth trends. Its leadership in advanced nodes, strategic global expansion, and pivotal role in AI, HPC, and 5G make it a "forever hold"-a stock that will continue to compound value as the digital economy evolves. With a 38% year-to-date share price rise and a full-year revenue growth forecast of 30%+, TSMC's trajectory is not just about sustaining dominance but accelerating it in an era defined by technological disruption.