Taiwan Semiconductor Manufacturing (NYSE: TSM), is acontract chip producer that has regained attention from institutional tradersfollowing President Trump’s “One Big Beautiful Bill.”TSMC commands about two-thirds of the global foundry market,giving it a market capitalization exceeding $1 trillion, supported by theexpansion of artificial intelligence applications. Despite its scale, newgrowth drivers remain, particularly under the U.S. legislation signed into lawin July.The bill introduces 35% tax credits for semiconductor firms,potentially lowering costs for TSMC if it expands advanced manufacturing in theU.S. before a 2026 deadline. If utilized, TSMC could become one of the mainbeneficiaries, while competitors may face difficulty meeting the same terms.This dynamic could also lead to short-term price fluctuations across theindustry.Market Growth and Revenue PerformanceThe global semiconductor market is projected to grow at acompound annual rate of 10.24% through 2030, reaching $1.29 trillion. Thattrajectory could push TSMC’s market capitalization toward $1.63 trillion andits stock to around $300.You may find it interesting at FinanceMagnates.com: TrumpEyes Intel Stake as Chip Politics Go Wild.Momentum in the sector has already exceeded forecasts.Global sales rose 19.1% in 2024, with further double-digit growth expected in2025. TSMC reported Q2 2025 revenue of $30.07 billion, a record, while itsAI-related business topped $10 billion for the first time.“TSMC posted earnings of $2.47 per share, beatingexpectations by $0.09,” said Steve Frauzel, head of market insights atJust2Trade. “The company raised its full-year revenue growth outlook to 30%,underlining confidence in its near-term trajectory.”Taiwan – the 21st largest economy in the world and producer of 90 percent of the world’s advanced semiconductor chip supply – deserves a seat at the table at the IMF.I thank my colleagues for joining me to pass the Taiwan Non-Discrimination Act.https://t.co/nVG5xexM9X— Young Kim (@RepYoungKim) June 26, 2025Analysts have also raised their targets. Needham’s CharlesShi increased his price target to $270 from $225, projecting AI revenues of $26billion this year, rising to $33 billion in 2026 and $46 billion in 2027.Pricing power remains strong. The company’s 2-nanometerchips are reportedly priced at $30,000 apiece, 50% above its 3-nanometerproducts. The anticipated launch of 1.6-nanometer chips in 2026 could enablefurther increases.Trading OutlookFor institutional traders, the prospect of TSMC reaching a$2 trillion valuation is material. The company’s dominance in producing themost advanced chips, coupled with high barriers to entry, supports thisoutlook.Read More: NvidiaVisits TSMC as China Clouds Gather Over AI Chips.From its current valuation, TSMC would need to grow by about75% over five years, equivalent to an 11% CAGR. This is below the company’s ownAI revenue target of $90 billion by 2029, suggesting upside.As shared on @60Minutes, only 12% of the world’s semiconductors are manufactured in the US today, down from 37% only 25 years ago. It’s critical to increase investment in this on American soil. pic.twitter.com/XFqP0b8cJe— Pat Gelsinger (@PGelsinger) May 3, 2021The stock yields about 1%, implying potential 12% annualizedreturns if growth targets are met. With a forward price-to-earnings ratio near28, valuations are demanding, but justified given the scale of opportunities inthe semiconductor market. A fair value estimate of $280 appears reasonable,balancing growth potential with competitive risks.Geopolitical ConsiderationsGeopolitical dynamics remain relevant. Trump’s emphasis ondomestic supply chains underpins future U.S. investment. At the same time,volatility is evident: U.S. Commerce Department official Jeffrey Kesslerrecently told TSMC and Samsung Electronics that waivers allowing them to sendU.S. technology to Chinese plants may be revoked.TSMC’s Market PositionFew companies achieve dominance in a sector as strategicallycritical and fast-growing as semiconductors. TSMC not only leads inmanufacturing the chips that underpin AI, but it also stands positioned tobenefit from U.S. tax incentives should it deepen its U.S. footprint.The interplay of political support, market expansion, andtechnological leadership positions TSMC as a central stock for institutionaltraders to watch. If the company meets its AI revenue goals by 2029, it couldconsolidate its role as one of Wall Street’s defining performers of the decade.This article was written by Dmytro Spilka at www.financemagnates.com.