Taiwan Semiconductor Manufacturing Company (TSM), or TSMC, the world’s largest contract chipmaker, just gave another strong sign that the AI boom is still growing fast. The company now expects the global chip market to cross $1.5 trillion by 2030, far above its earlier $1 trillion forecast, showing how quickly AI demand is driving the industry.
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AI Is Driving the Chip Market
According to TSMC, AI and high-performance computing could make up 55% of the global chip market by 2030. In comparison, smartphones may account for 20%, while automotive chips could contribute about 10%.
This shows how quickly demand is moving from traditional consumer devices toward AI servers, cloud systems, and data centers.
Importantly, TSMC expects demand for AI accelerator wafers to rise 11 times between 2022 and 2026. The company also expects CoWoS packaging capacity to grow more than 80% annually through 2027. CoWoS is a key packaging technology widely used in AI chips made by companies such as Nvidia (NVDA).
At the same time, TSMC is increasing production of its most advanced chips. Capacity for its 2-nanometer and next-generation A16 technologies is expected to grow about 70% annually between 2026 and 2028.
TSMC’s Global Expansion Is Speeding Up
TSMC’s latest forecast also shows how quickly the global chip supply chain is changing. To meet rising AI demand, the company plans to expand production aggressively over the next few years, including new wafer fabs and advanced packaging facilities.
A large part of that growth is now happening outside Taiwan, as governments and tech companies push for more local chip production.
In Arizona, TSMC’s first fab is already running, while more facilities are under construction. The company expects output from the site to rise sharply by 2026 and has already secured more land for future expansion. Also, TSMC upgraded plans for its second Japan fab to produce advanced 3-nanometer chips due to strong demand.
Is TSM Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on TSM stock based on five Buys, one Hold, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average TSM price target of $465 per share implies 19.3% upside potential.
