TSMC may end up gaining more from the AI chip boom than Nvidia or AMD, which is good news for TSMC shareholders and anyone betting on chip manufacturing over chip design.

• Big cloud companies like Amazon and Alphabet are designing more of their own AI chips, which chips away at Nvidia and AMD's grip on the market.
• No matter who designs the chip, it still has to be made — and TSMC controls that step, with the most advanced production methods and the largest capacity in the world.
• Demand is so strong that even TSMC is short on capacity, so it is raising spending on new plants sharply this year over last.
• Strong demand also lets TSMC charge more, keeping profits healthy even though new production methods usually squeeze margins early on.
• Its stock still looks reasonably priced against expected profit growth of about 30% a year over the next two years.

Outlook: As long as AI chips need the most advanced production and huge volumes, TSMC keeps winning orders regardless of which designer comes out on top.