Like cherry petals
our chips storm out by millions;
Mister Market sleeps.
-- Anders Bylund, 2010

The global economy gently roars back to health, like an injured lion cub. Once-reticent businesses once again spend on improving their IT environments. Meanwhile, trendy gadgets like smartphones and tablet computers are flooding the market. All told, the microchip makers can hardly keep up with demand.

So it's hardly surprising to see Taiwan Semiconductor Manufacturing (TSMC) (NYSE: TSM) reporting record sales and profits in its first quarter. TSMC saw sales more than double the year-ago level, reaching $2.94 billion (in U.S. dollars). Net income also surpassed expectations. When NVIDIA (Nasdaq: NVDA), Broadcom (Nasdaq: BRCM), and Texas Instruments (NYSE: TXN), and many others are fighting for more of your manufacturing capacity because their customers are clamoring for more, well, times are good.

Since TSMC is the world's largest chip-manufacturing outfit, industrywide shortages represent a huge growth opportunity for the company. A new and absolutely enormous factory will soon expand TSMC's capacity very significantly, and a recent legal settlement with smaller rival Semiconductor Manufacturing International (NYSE: SMI) leaves TSMC with a 10% stake in the smaller firm. Both developments make me think that there are acquisitive plans abrew in Taiwan.

These initiatives should keep the distance between TSMC and small rival foundry United Microelectronics (NYSE: UMC) comfortably wide. The chip market itself is now expected to expand by 36% this year. GlobalFoundries, the former Advanced Micro Devices (NYSE: AMD) manufacturing arm, is missing out on this growth phase while it ramps up its list of third-party clients under contract.

The only surprising part of TSMC's brisk success is why the stock hasn't followed suit. Despite 36.6% net margins -- in the notoriously low-margin hardware manufacturing business, no less -- and hefty growth assured for the foreseeable future, this stock has underperformed the S&P 500 benchmark over the past year, and it's down again today after this stellar report.

Do me a favor, will you? I just entered a thumbs-up rating on TSMC in Motley Fool CAPS. It's a five-star stock already, but you can help to make sure this badge of market-beating honor stays in place by following my example right now. It's the least we can do for a very deserving stock.

Fool contributor Anders Bylund owns shares in TSMC and AMD, but he holds no other position in any of the companies discussed here. He is an All-Star CAPS player with a zest for National Poetry Month. NVIDIA is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletter services free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.