When most people hear “AI investing,” their minds jump straight to the big names.
OpenAI. ChatGPT. Maybe Microsoft (NASDAQ: MSFT) or Google.
But here’s the thing: the companies making headlines aren’t the only ones making money.
In fact, some of the biggest winners are the ones you rarely see in the news.
They’re the ones building the picks and shovels of the AI gold rush.
Why infrastructure matters
Think about the early days of the internet.
The dot-com companies came and went.
But the businesses that laid the pipes, made the servers, or built the chips?
They became giants.
Cisco (NASDAQ: CSCO) supplied the routers.
Amazon (NASDAQ: AMZN) built the cloud.
AI is going through the same cycle now. Behind every viral chatbot and breakthrough demo is a foundation of computing power that makes it all possible.
And one company is emerging as a critical player: Taiwan Semiconductor Manufacturing Company (NYSE: TSM) or TSMC.
What TSMC really does
TSMC isn’t designing the AI models you use. It isn’t building the flashy apps that go viral.
What it does is far more fundamental.
TSMC manufactures the chips that power those models.
Nvidia (NASDAQ: NDVA) might get the glory for its graphics processors. Apple (NASDAQ: AAPL) might make headlines for its sleek iPhones.
But without TSMC producing those chips at scale, none of it happens.
In plain English: if AI is the race car, TSMC is the only factory capable of producing the engines at the volume and quality the world needs.
The numbers tell the story
Here’s why investors are paying attention.
TSMC’s high-performance computing segment — the part tied most closely to AI chips — has grown so fast it has overtaken its smartphone segment for the first time.
AI “accelerator” revenue (think Nvidia chips rolling off TSMC’s production lines) more than tripled last year.
And TSMC expects that figure to double again in 2025. Looking further out, management is forecasting mid-40% annual growth in this segment through 2029.
That’s a staggering trajectory, especially for a company already producing at a global scale.
Why TSMC is hard to replace
What truly sets TSMC apart is the combination of scale, technology, and customer reliance that no other chipmaker has managed to replicate.
Its chipmaking plants cost tens of billions of dollars each, and no competitor comes close to matching its efficiency at the most advanced production levels.
On top of that, TSMC has maintained a clear technology lead.
It is already mass-producing 3-nanometre chips and is preparing to move to 2-nanometre, while most rivals are still playing catch-up.
This leadership has created a powerful lock-in effect with customers.
Industry giants such as Nvidia (NASDAQ: NVDA), Apple, AMD (NASDAQ: AMD), Qualcomm (NASDAQ: QCOM), Google, Amazon, and even Tesla (NASDAQ: TSLA) all depend heavily on TSMC’s output.
For these companies, switching suppliers would not just be inconvenient. It would set back their product timelines by years.
Layered on top of this is a geopolitical dimension.
While competitors like Intel (NASDAQ: INTC) and Samsung are struggling to close the gap, the sheer expertise, ecosystem, and trust that TSMC has built over decades are not easily copied.
That makes it more than just a supplier.
For the global AI boom, it is an indispensable partner.
Why this matters for investors
The obvious takeaway is that demand for AI isn’t slowing.
If anything, it’s accelerating.
And chipmakers like TSMC are positioned right in the middle of that demand.
But the hidden point is this: while app makers may rise and fall, the infrastructure layer is much harder to replace.
Every major AI player — Nvidia, Apple, Google, Meta, Microsoft, Amazon — relies on TSMC to produce the hardware.
That kind of lock-in makes TSMC less of a speculative bet and more of a backbone business.
The bigger picture
Yes, AI headlines grab attention with demos, viral chatbots, or new product launches.
But history shows that the biggest, most durable returns often come from the companies working quietly behind the scenes — the ones selling the essentials every other player depends on.
That’s why smart investors aren’t just watching consumer apps. They’re looking closely at the infrastructure.
And right now, TSMC is at the heart of that story.
Get Smart: How Singapore investors can gain exposure
For investors here in Singapore, owning a stake in TSMC isn’t as straightforward as buying a local blue-chip on the SGX. But there are several ways to get exposure.
The most direct route is through TSMC’s American Depositary Receipts (ADRs), which trade on the New York Stock Exchange under the ticker TSM. This gives you ownership in the company itself and direct participation in its growth.
There’s also an indirect path.
Many of the biggest customers are relying on TSMC, from Nvidia and Apple to Microsoft and Amazon. These companies are listed on US markets.
Owning these companies means you’re still benefiting from TSMC’s production dominance, albeit one step removed.
If you want to see which other companies could be the “backbone winners” of the AI revolution, we’ve put together a free report that breaks it down in detail.
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Disclosure: Alex does not own any of the stocks mentioned.
