Taiwan Semiconductor's Advantage Over Nvidia and the AI Infrastructure Boom

Taiwan Semiconductor (TSMC) has a key advantage over Nvidia as it is the largest dedicated chip foundry in the world, with a 60% market share, and is helping Nvidia insource and build chips in the US. Investors should consider information technology, industrials, and utilities sectors for growth opportunities. TSMC pays a good dividend and has reasonable valuations, while AECOM, Lockheed Martin, Northrop Grumman, RTX, NiSource, and Constellation Energy are also attractive options for investing.

Taiwan Semiconductor Manufacturing Company (TSMC) holds a significant advantage over Nvidia in the semiconductor industry. With a 60% market share, TSMC is the largest dedicated chip foundry in the world [1]. This position allows TSMC to play a crucial role in the insourcing of chips by Nvidia in the United States. Nvidia, the largest chip seller globally, does not manufacture its own chips, instead relying on TSMC for production [1].

Given this strategic advantage, investors should consider the sectors that benefit most from the spending on AI infrastructure, aerospace, and defense. These sectors include information technology, industrials, and utilities. TSMC's strong position in these sectors makes it an attractive investment option.

In the information technology sector, TSMC's dividend payments and reasonable valuations make it an appealing choice. The company's partnership with Nvidia to build chips in the US further strengthens its position in the market [1]. Additionally, TSMC's ability to supply AI infrastructure with its advanced manufacturing capabilities positions it well for future growth.

Industrials is another sector that stands to benefit from TSMC's influence. Companies like AECOM, which provides engineering, design, and construction services for data centers, are poised to grow as data center construction increases across the country [1]. The aerospace and defense sector also benefits from TSMC's technology, with companies like Lockheed Martin and Northrop Grumman set to see increased spending due to NATO's commitment to spend up to 3% of GDP on defense over the next decade [1].

Utilities is a sector that pairs well with AI due to the need for power to support the AI revolution. Companies like NiSource and Constellation Energy, which supply natural gas and nuclear power respectively, are attractive investment options. Both companies offer dividends and trade at reasonable valuations, making them resilient in volatile markets [1].

Investors should carefully evaluate these sectors and the companies within them to identify potential growth opportunities. TSMC's strategic advantage and the growing demand for AI infrastructure and aerospace and defense technologies make it a promising investment choice. However, it is essential to monitor the broader economic conditions and the specific challenges faced by these sectors.

References:
[1] https://www.thestreet.com/video/this-chip-stock-has-a-key-advantage-over-nvidia
[2] https://www.lowyat.net/2025/364577/apple-tsmc-2nm-chip-production/
[3] https://www.ainvest.com/news/photronics-plab-earnings-volatility-ai-driven-growth-opportunities-2508/
[4] https://www.marketscreener.com/news/aecom-consortium-appoints-to-major-national-highways-framework-ce7c50d8d981ff26