TSMC's May revenue rose approximately 30% year-over-year, continuing a streak of double-digit growth fueled by insatiable demand for advanced AI chips — particularly CoWoS-packaged HBM-adjacent dies and N3/N4 nodes used by hyperscalers and NVIDIA. The company is the sole manufacturer capable of producing the leading-edge silicon at scale that underpins the AI buildout, giving it structural pricing power and near-zero substitution risk in the near term.

The 'undervalued' thesis typically rests on TSMC trading at a discount to US semiconductor peers on a forward P/E basis despite superior revenue visibility and margin expansion. The key watch items: whether May's strength flows into Q2 guidance lift at the July earnings call, and whether geopolitical Taiwan risk or a capex digestion pause by hyperscalers compress the multiple before fundamentals can close the gap.