Taiwan Semiconductor Manufacturing (NYSE: TSM) shareholders are quite used to hearing this refrain: Profit soars; the stock doesn't. What gives?

The world's largest chip foundry, by sales volume, this morning reported second-quarter earnings of $0.24 per American depositary share on $3.3 billion in sales. That's 41% revenue growth and 65% higher earnings year over year. Management noted that demand for chip manufacturing services remains at an all-time high. The company is building out capacity at a breathless pace to reduce the waiting lines, but still can't get rid of the problem altogether.

Semiconductor designers around the world depend on Taiwan Semi, United Microelectronics (NYSE: UMC), and the GlobalFoundries operation that used to be part of both Chartered Semiconductor Manufacturing and Advanced Micro Devices (NYSE: AMD). When these foundries can't keep up with demand, designers who completely outsource production of their products, like NVIDIA (Nasdaq: NVDA) and Broadcom (Nasdaq: BRCM), start complaining about shortages holding their business back. That has been the case for about a year now, so TSMC and the others are responding by building more, bigger, and better factories.

That is taken as a negative sign by analysts and investors. The theory is that short supply is good for business because it keeps prices nice and high. If the industry as a whole overestimates the capacity needs and builds too much, you'll end up with free-falling prices in a global oversupply situation. This happened to the memory chip sector a couple of years ago, as any Micron Technology (NYSE: MU) shareholder will tell you while fighting back the tears. One would hope that the industry at large would have learned some lessons from that debacle, no?

So the eternal struggle between good news (building out capacity to grow sales) and bad (maybe they're building too much?) seems to keep TSMC's share price on a tight leash. The stock fell on news of this report and has traded in a very narrow range over the last -- oh, forever. Despite earnings as predictable as Big Ben, serious cash-generating powers, and even a dividend yield that puts other technology highfliers to shame, this stock gets no respect.

But it's also a five-star CAPS stock, so I can't be the only one who thinks TSMC is being treated like a redheaded stepchild. Join me and 425 other All-Stars in rating this stock "outperform" in CAPS (versus only three Negative Natties). One day the market reality will match TSMC's business, and you'll be glad you jumped aboard the bandwagon.