Taiwan's semiconductor industry is booming on AI demand, but power, people, and security limits are closing in — good for chipmakers and investors now, risky later.

• Taiwan's chip revenue should approach $300 billion this year, up more than 40% from last year.
• The AI data center buildout is driving it, lifting profits at companies like TSMC and pushing global stocks to record highs.
• Power supply, skilled workers, and cybersecurity are the three bottlenecks that could cap the growth.
• Taiwan's dominance is straining ties with Washington — Trump accuses Taiwan of taking America's chip business and wants Taiwanese firms to build more in the US.
• Worries are growing about when all the AI spending will actually pay off, and some analysts say tech valuations have run too far.

Outlook: The next decade belongs to AI, but the ride will not be a straight line up — expect more pressure on Taiwan to move production abroad and more questions about stretched tech valuations.