Taiwan Semiconductor Just Became Even More of an AI Anchor On Nvidia’s -25% Plummet Alex Sirois Fri, November 13, 2026 at 8:45 AM EST 5 min read TSM +1.01% NVDA +2.25% ASML -0.11% ASML -0.11% TSM +1.01% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Taiwan Semiconductor (TSM) fell just 9% while Nvidia dropped 27% in a month, proving TSMC anchors the AI build-out whichever chip designer wins.
ASML trades at 23 times forward earnings versus 18 for TSMC, yet posts thinner margins and trails TSMC's five-year returns.
TSMC raised its full-year revenue growth forecast to about 44%, and October revenue jumped 60% year over year.
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I added to my Taiwan Semiconductor (NYSE:TSM) position again this week, and every new data point reinforces my conviction to keep buying. Over the past month, Nvidia (NASDAQ:NVDA) shares fell 27.28%. My foundry shares slipped 8.87% over the same stretch. That gap shows me which company actually holds the AI build-out together.
Nvidia's slide sped up after reports that Jensen Huang had an affair with a woman U.S. officials reportedly concluded was "a Chinese intelligence asset". Then came his resignation as CEO. As investors lose trust in a single chip designer, I expect more of them to look at the picks-and-shovels companies that supply the whole industry (we covered seven of those AI suppliers, from power to cooling, in a free report you can grab here).
TSMC makes the chips, so it gets paid for every wafer no matter which designer wins. The chief executive put it plainly on the October call: "Therefore, all the AI players are working with TSMC." He also said "Demand is still far above our capability to supply today." When a company holds the rarest capacity in technology, I want to own it no matter whose logo ends up on the chip.
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One key factor is how much of the leading edge TSMC controls. Nodes of 7nm and below made up 79% of wafer revenue in the third quarter. The 2nm share rose to 8% from 3% one quarter earlier, and high-performance computing accounted for 68% of revenue.
Growth keeps showing up in earnings as well. Third-quarter EPS came in at $4.60 against a consensus of $4.46. Management raised its full-year forecast to about 44% revenue growth in U.S. dollars, up from slightly above 40%. October revenue rose 59.7% year over year.
I also still get a reasonable price and a growing income stream. Shares trade at a forward P/E of 18. The quarterly ADR dividend rose from $0.683789 in April 2025 to $1.366286 declared on November 10, 2026. Management also reaffirmed its goal of "a sustainable and steadily increasing cash dividend per share".
Plenty of readers would reach for ASML (NASDAQ:ASML) first. It costs more: 23 times forward earnings against 18 for TSMC. Its third-quarter gross margin was 57.5%, compared with TSMC's 66.4%. Its operating margin was about 44.4%, against TSMC's 58.7%. Over five years, TSMC shares returned 270.16%, while ASML returned 84.9%. ASML makes money when chipmakers spend on new equipment, and that spending runs in cycles. TSMC earns money on every wafer it ships. I would rather own the customer that keeps those tool orders coming.
Taiwan is the risk I take most seriously. European auditors wrote that "cross-strait tensions between China and Taiwan represent a source of persistent insecurity for the sector." Margins also face pressure. Gross margin fell 1.3 percentage points from the prior quarter, and management expects drag from overseas fabs to grow to 3%–4%.
Neither risk has changed my thesis, because TSMC is spreading its exposure. Its second Arizona fab should begin volume production in the third quarter of 2027, and a Japan fab is scheduled for 2028. Even with that drag, fourth-quarter gross margin guidance of 65% to 67% still stands above ASML's current margins.
N2 capacity should more than double in 2027, and A14 volume production starts in 2028. When analysts asked about AI accelerator growth, the chief executive answered: "It probably will be higher." Chip designers will keep trading places at the top of AI, and every one of them will still need TSMC to build its chips.
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