Half a century ago, the idea of a $2 trillion company was unthinkable. Just consider this: In July 1975, the entire U.S. GDP barely cleared $1.7 trillion. Fast-forward to 2025, and the five largest companies in the world -- Nvidia (NVDA 2.13%), Microsoft (MSFT 2.44%), Apple (AAPL 1.62%), Amazon (AMZN 3.95%), and Alphabet (GOOG 2.49%) (GOOGL 2.30%) -- individually command valuations at or above that.
At the moment, two companies are within a few hundred billion of the $2 trillion mark. These are Meta (META 3.91%), $1.9 trillion, and Broadcom (AVGO 2.66%), $1.7 trillion.
But there's another company that looks strong enough to cross the $2 trillion mark by 2028, or even sooner than that. Indeed, it's a company without which several tech giants would lose their dominance: Taiwan Semiconductor Manufacturing (TSM +0.19%). Here's why I think its market cap of about $1 trillion will double in three years.
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Why TSMC fits the $2 trillion thesis
TSMC is the world's first and largest pure-play semiconductor foundry. What that means is simply this: Instead of designing chips, TSMC manufactures them for hundreds of clients. These clients include other trillion-dollar companies, like Nvidia and Apple, as well as semiconductor companies like Advanced Micro Devices (AMD 0.79%).
Just how dominant TSMC is in the foundry industry can be summed up by two pieces of data: TSMC commands about 70% of the global foundry market (according to data by research firm TrendForce), and it held about 35% of the expanded foundry market for more advanced chips in the first quarter of 2025 (according to Counterpoint Research).
To put it another way, TSMC's second-quarter 2025 foundry revenue was more than $30 billion. The foundry revenue of its closest competitor, Samsung, was about $3.16 billion, according to TrendForce.
TSMC has been dominating the foundry scene since Dr. Morris Chang founded the company in 1987. Superior execution by Chang and his successors has dug TSMC a deep competitive moat in the advanced chip industry. The company is often the first (or sole) supplier for some of the most advanced chips on the market.
What needs to happen for TSMC to hit a $2 trillion valuation by 2028
By now, it's clear that TSMC is in firm control of the foundry market. But the question still remains: Can this company's market cap really double in three years?
One back-of-the-envelope way to answer this is by looking at the company's forward price-to-earnings ratio (P/E). At today's price, TSMC is trading at about 22 times earnings. If we keep that multiple the same, the company needs to double its net income (projected to hit about $48 billion in 2025) to about $90 billion to $100 billion by 2028.
On paper, that doesn't sound all that outlandish. Indeed, Wall Street is already forecasting high-teens percentage revenue growth through 2027, and TSMC's margins are some of the best in the business. If TSMC can keep a stronghold on the chipmaking industry, its current trajectory could be enough to get it to the $2 trillion mark by late 2028 or early 2029.
TSM Revenue (Annual) data by YCharts
But I don't want to make it sound as if this will be a walk in the park. TSMC doesn't operate in a vacuum, and several headwinds could knock the company off course. Geopolitical tension between China and Taiwan is an ongoing concern and was the reason Warren Buffett cited when he sold most of his TSMC stock a couple of years ago. Likewise, the current geopolitical rift between China and the U.S. could cause problems for TSMC down the road. It's notable, for instance, that the U.S. recently revoked fast-track export licenses for shipping U.S. chipmaking equipment to TSMC's main plant in China.
At the same time, TSMC stands at the center of one of the most exciting developments in technology: artificial intelligence. As AI models get larger and computing needs explode, demand for TSMC's most advanced chips only grows. This should be even more the case when it starts producing 2-nanometer chips, which, according to TSMC, will consume 25% to 30% less power than its 3nm chips, even when configured to run at the same speeds.
Whether that's enough to outweigh political risks and other headwinds is an open question. Still, if tailwinds hold and the company keep producing at today's rates, $2 trillion in three years isn't out of reach at all.
