In-Depth Analysis of TSMC's R&D Investment and Technological Leadership

Based on the latest data and market research, I conducted a systematic analysis of TSMC’s R&D investment status and the sustainability of its technological leadership. Below are the detailed research conclusions:

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Indicator	2024 Data	Trend Analysis
R&D Expenditure	US$6.355 billion (approx. NT$194.4 billion)	YoY +12%, a record high
Proportion of Revenue	7.1%	Decreased from approx. 8.5% in 2023
Five-Year Cumulative R&D Investment	Approx. US$30 billion	Covers R&D of advanced processes including 14Å, 16Å, and 2nm

: Although the proportion of R&D investment to revenue declined slightly due to rapid revenue growth (33.9% revenue growth in 2024), , and the scale of R&D investment has reached approximately one-quarter of the total R&D investment of Taiwan’s manufacturing industry[1][2].

TSMC adopts a dual-drive strategy of “R&D + Capital Expenditure”:

• Five-Year Cumulative Capital Expenditure
  : US$167 billion
• 2025 Capital Expenditure
  : US$40.9 billion (YoY +37%)
• Planned 2026 Capital Expenditure
  : US$52-56 billion
• R&D to Capital Expenditure Ratio
  : Approx. 15-17% (R&D investment continues to provide technical support for capital expenditure)

The chart above shows that TSMC’s stock price has risen by approximately 20% since October 2025, with the current price at $346.23, far exceeding the 50-day moving average ($298.32), showing a strong upward trend[0].

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Technology Node	Revenue Share	Strategic Significance
5nm	35%	Core revenue source
3nm	28%	Second-largest revenue source, fastest growth
7nm	14%	Mature yet still competitive
Total Advanced Processes (≤7nm)	77%	Significantly increased from 69% in 2024

: The revenue share of advanced processes increased from 69% in 2024 to 74% for the full year of 2025, fully demonstrating TSMC’s dominant position in high-end chip manufacturing[3][4].

• Mass Production Timeline
  : Small-scale mass production began at the end of 2025, with large-scale ramp-up in 2026
• Technical Architecture
  : Adopts Gate-All-Around (GAA) transistor architecture
• Performance Improvement
  : 15-20% performance increase and 25-30% power reduction compared to 3nm
• First Batch of Customers
  : Mobile chip demand from Apple, Qualcomm, etc. will migrate to the 2nm platform

• Global Market Share
  : TSMC provides packaging for over 90% of AI chips
• Capacity Expansion
  : Monthly capacity of approx. 70,000 wafers in 2025, expected to expand to 120,000 wafers by the end of 2026
• Customer Coverage
  : Highly relied on by AI chip giants such as NVIDIA, AMD, and Broadcom
• Strategic Value
  : CoWoS capacity allocation directly affects AI chip shipment volumes, making TSMC a “critical bottleneck node” in the AI industry chain[4].

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Advantage Area	Specific Performance
Leading Technology Density	TSMC’s N3P transistor density reaches 294 MTr/mm², leading Samsung/Intel’s approx. 250 MTr/mm²
Yield Advantage	TSMC’s yield for mature processes is significantly higher than that of competitors
Customer Ecosystem	Aggregates global top chip design companies such as Apple, NVIDIA, AMD, Qualcomm, and Broadcom
Capital Expenditure Scale	Planned 2026 capital expenditure of US$52-56 billion, far exceeding the foundry business investment of Samsung and Intel
Sustained R&D	Cumulative R&D investment of US$30 billion over the past 5 years, with over 100,000 global patents

Risk Type	Specific Details
Samsung’s Catch-Up	The yield of Samsung’s 2nm process has increased from 50% to 70%, and the company is turning from loss to profit
Intel’s Competition	Intel’s 18A (1.8nm) has begun small-scale mass production, and is expected to gain market share in 2026
Geopolitics	U.S. chip restriction policies against China may impact revenue from the Chinese market (China region accounts for approx. 9% of revenue)
Decline in R&D Proportion	The proportion of R&D investment to revenue decreased from 8.1% in 2020 to 7.1% in 2024

Indicator	TSMC	Samsung	Intel	SMIC
Global Foundry Market Share	62.3%	6.8%	4.0%	5.5%
Latest Process Node	2nm (mass production in 2026)	2nm	18A (1.8nm)	14nm
Transistor Density	294 MTr/mm²	~250 MTr/mm²	~250 MTr/mm²	~100 MTr/mm²
AI Chip Capacity	Dominant position	Niche	Catching up	Restricted

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• Current Stock Price
  : $346.23 (January 15, 2026)
• Market Capitalization
  : US$1.79 trillion
• Price-to-Earnings Ratio (TTM)
  : 27.62x
• 2026 Earnings Forecast
  : Approx. 22x P/E (based on expected 30% YoY revenue growth)
• Analyst Target Price
  : $377.50 (9.2% upside potential)
• Rating
  : 72.7% of analysts give a “Buy” rating[0]

• Trend
  : Upward trend (breakout pattern, to be confirmed)
• MACD
  : Bullish alignment, no death cross signal
• KDJ
  : K-value 78.2, D-value 77.0, buy signal
• RSI
  : In overbought territory (overbought_risk)
• Key Resistance Levels
  : $351.33 → $360.98
• Support Level
  : $326.59[0]

: The absolute amount of TSMC’s R&D investment continues to grow, but its proportion to revenue has declined slightly due to explosive revenue growth. A 7.1% R&D-to-revenue ratio remains a healthy level in the semiconductor industry, and the company has offset the slight decline in R&D proportion through large-scale capital expenditure (accounting for over 40% of revenue).

: In the foreseeable future (2026-2027), TSMC’s technological leadership , for the following reasons:

1. Leading Mass Production of 2nm
   : Although Samsung and Intel have entered the 2nm/1.8nm node, there are still gaps in transistor density and yield
2. Monopoly in Advanced Packaging
   : The leading advantage of CoWoS packaging technology will be maintained for at least 2-3 years
3. Strong Customer Stickiness
   : Top AI chip manufacturers are deeply tied to TSMC’s production capacity
4. Scale of Capital Expenditure
   : TSMC’s capital expenditure scale is several times that of its competitors

: Continuous attention should be paid to the progress of yield improvement for Samsung’s 2nm process, the mass production status of Intel’s 18A process, and the impact of geopolitical factors on the supply chain.

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[1] TechSoda - TSMC 2024 Annual Report Highlights (https://techsoda.substack.com/p/explainer-tsmcs-2024-annual-report)

[2] TSMC Business Overview 2024 - Official Annual Report (https://investor.tsmc.com/sites/ir/annual-report/2024/2024 Business Overview_0.pdf)

[3] Data Center Dynamics - TSMC announces 2026 capex spend of $56bn (https://www.datacenterdynamics.com/en/news/tsmc-announces-2026-capex-spend-of-56bn-after-posting-eighth-consecutive-quarter-of-growth/)

[4] Sina Finance - TSMC: The “Real Big Shot” in AI, Who Would Reject It? (https://finance.sina.com.cn/stock/relnews/us/2026-01-15/doc-inhhkwcm7519826.shtml)

[5] Semiconductor Industry Observer - 84.8 Billion, AI Drives Record Semiconductor Foundry Business (https://zhuanlan.zhihu.com/p/1986863621234508990)

[6] 36Kr - Can’t Beat TSMC, What to Do? (https://m.36kr.com/p/3604769288684547)

[7] LinkedIn - TSMC’s R&D Expenses Reach Record High in 2024 (https://www.linkedin.com/posts/erudite-asia_台湾半导体龙头-台积电研发费用19)