Taiwan Semiconductor Manufacturing (TSM) Sits at the Absolute Center of the AI Compute Supply Chain

Taiwan Semiconductor Manufacturing (TSM) Sits at the Absolute Center of the AI Compute Supply Chain Soumya Eswaran Wed, June 3, 2026 at 4:55 PM GMT+2 4 min read TSM ^GSPC CL=F Green Alpha Investment recently released its Q1 2026 investor letter. A copy of the letter can be downloaded here . Green Alpha Investment’s philosophy emphasizes that economic growth and portfolio returns are driven by companies that accelerate productivity and can tackle global economic risks.

Next Economy Growth & Income Strategy aims for an above-average dividend yield in a relatively low short-term volatility portfolio. The first quarter of 2026 marked a shift, with the S&P 500 ending Q1 in negative territory and oil prices surging to over $120 per barrel after Iran closed the Strait of Hormuz. Despite these challenges, most of the Next Economy strategies outperformed the benchmark.

Green Alpha navigates economic challenges by focusing on structural changes by targeting companies involved in electrification, advanced materials, and clean energy, positioning them as beneficiaries of current disruptions rather than casualties. In addition, please check the firm’s top five holdings to know its best picks in 2026. In its first-quarter 2026 investor letter, Green Alpha Investment highlighted Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM ).

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the world’s leading contract chip manufacturer, producing advanced semiconductors for major global technology companies.  On June 2, 2026, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) closed at $446. 69 per share.

One-month return of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was 6. 48%, and its shares gained 120. 70% over the past 52 weeks.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has a market capitalization of $2. 317 trillion. Green Alpha Investment stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q1 2026 investor letter: "Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has commenced mass production of 2nm chips using nanosheet Gate-All-Around transistors—the most significant architectural leap in a decade—with initial yields already reaching 70-80%, well ahead of any competitor.

The N2 node delivers a 15% performance boost at the same power or a 25-30% reduction in power consumption versus 3nm, and TSMC expects to reach 100,000 wafers per month of 2nm capacity by year-end 2026. Apple, NVIDIA, AMD, and Google have all secured capacity, and 2nm revenue is projected to surpass 3nm and 5nm combined by Q3 2026. TSMC is effectively the world’s sole manufacturer of bleeding-edge silicon at scale, with 38% of the $320 billion global foundry market and a technology lead that Samsung and Intel cannot close in the near term.

With $56 billion in planned 2026 capex and pricing power to raise wafer prices 5-10% across all sub-5nm nodes, TSMC’s competitive moat is widening, not narrowing. As AI workloads demand ever more advanced process nodes and advanced packaging (CoWoS capacity expanding 70%+ annually), TSMC sits at the absolute center of the AI compute supply chain. " Story Continues Is TSM a good stock to buy?

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is in 6th position on our list of  40 Most Popular Stocks Among Hedge Funds Heading Into 2026 . According to our database, 234 hedge fund portfolios held Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) at the end of the first quarter, up from 224 in the previous quarter. In Q1 2026, Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM)  revenue  increased 6.

4% (in U. S. dollar terms) sequentially to $35.

9 billion, modestly exceeding the first quarter guidance.  While we acknowledge the potential of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock .

In  another article , we covered Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) and shared the list of best most active stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q1 2026  page for more investor letters from hedge funds and other leading investors. READ NEXT:  33 Stocks That Should Double in 3 Years  and  15 Stocks That Will Make You Rich in 10 Years .

Disclosure: None. This article is originally published at Insider Monkey .