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Asia dominates the global semiconductor supply. Five companies, spanning Taiwan, South Korea, and Japan, sit at the critical juncture of the AI buildout, controlling everything from fabrication to the equipment that makes chips possible.
Quick facts
- TSMC delivered $90 billion in revenue in 2024, with a 59% gross margin and shares up 55% in 2025.
- Advantest shares doubled (+102%) in 2025 as AI-driven chip testing demand surged.
- SK Hynix is Nvidia's primary HBM supplier, positioning it at the centre of the AI accelerator boom.
1. Taiwan Semiconductor Manufacturing Co. (TSM)
TSMC is the world's largest contract chip manufacturer, producing advanced semiconductors for Apple, Nvidia, AMD, and Qualcomm. As a pure-play foundry, it leads in 5-nanometer (5nm) and 3- nanometer (3nm) chip production, with smaller nodes in development.
The company posted $90 billion in revenue for 2024 with a 59% gross margin and 36% return on equity.
Shares delivered a total return of 55% in 2025, with analysts forecasting a further ~30% revenue increase in 2026, underpinned by its $100 billion US expansion programme.
The key risk for the company is its geopolitical exposure, with Taiwan Strait tensions remaining the sector's most-watched tail risk.
What to watch
- US expansion progress: Any delays, cost blowouts, or political friction concerning TSMC's $100 billion Arizona investment could weigh on sentiment.
- Customer order visibility: Watch for any guidance updates from Apple, Nvidia, or AMD on chip orders, as TSMC's revenue is highly concentrated among a handful of clients.
- Geopolitical developments: Any escalation of Taiwan Strait tensions could trigger sharp moves regardless of fundamentals.
- Next-node ramp: Progress on 2nm production and yield rates will be a key signal for TSMC's ability to maintain its technology lead.
2. Samsung Electronics (KR:005930)
Samsung is one of the few companies globally that both designs and fabricates chips at scale. It competes across DRAM, NAND flash, and logic chip segments, and remains a core supplier to global tech giants.
Samsung's wide scope is a strength, but also a complexity. Its memory division faces margin pressure from inventory cycles, while its foundry business continues to lag TSMC in leading-edge yields.
The AI-driven memory boom may provide a tailwind, though execution in HBM production has been slower than local rival SK Hynix.
What to watch
- HBM qualification progress: Samsung has been working to qualify its HBM3E chips with Nvidia. Any confirmation of a major supply win could be a meaningful catalyst.
- Memory pricing trends: DRAM and NAND spot prices could be an indicator of Samsung's margin trajectory.
- Foundry yield improvements: Samsung's logic foundry business has struggled with yields at advanced nodes; any credible progress here could re-rate the division.
- Management guidance: Following a period of earnings volatility, clarity on capex plans and divisional targets at upcoming results will be closely watched.
3. Advantest (ATEYY)
Tokyo-based Advantest makes testing equipment used to verify chips meet performance and quality standards.
It supplies to Samsung, Intel, Nvidia, Qualcomm, and Texas Instruments, allowing it to benefit from chip industry growth broadly, regardless of which foundry wins market share.
Advantest shares doubled in 2025 (+102%), and it raised its sales forecast by 21.8% and earnings forecast by 70.6% for the year ending March 2026.
What to watch
- Order backlog updates: Any contraction in Advantest's backlog could be an early warning sign after the strong 2025 run.
- AI chip testing demand: As chips grow more complex, testing time per chip increases. Monitor whether AI accelerator volumes from TSMC and Samsung start to drive outsized testing demand.
- FY2026 guidance: The next forecast update will be critical in confirming whether 2025's upgrade cycle has further to run.
4. Tokyo Electron (T:8035)
Tokyo Electron is among the world's largest suppliers of semiconductor production equipment, specialising in deposition, etching, and cleaning tools.
Every major chipmaker, including TSMC, Samsung, and SK Hynix, depends on TEL's systems to scale production.
As chipmakers invest billions to expand capacity, TEL's order book grows. The risk lies in potential US export restrictions on advanced equipment sales to China, which remains one of the primary revenue segments for the company.
What to watch
- US export control policy: China accounts for a significant portion of TEL's revenue. Any tightening of equipment export rules is the most immediate risk to watch.
- Chipmaker capex announcements: TSMC, Samsung, and SK Hynix's capital expenditure plans for 2026 directly translate into equipment orders. Any cuts could flow through to TEL's order book.
- New tool adoption cycles: Monitor whether TEL's next-generation deposition and etch tools are being adopted at leading-edge fabs.
5. SK Hynix (KR:000660)
SK Hynix is the world's second-largest memory chip maker and has emerged as arguably the clearest AI-era beneficiary in the memory space.
It is Nvidia's primary supplier of High Bandwidth Memory (HBM) chips, the specialised memory used in AI accelerators like the H100 and B200.
HBM demand has driven a dramatic re-rating of SK Hynix's revenue profile and market standing. With AI infrastructure spending showing little sign of slowing heading into 2026, the company's HBM franchise could remain a key differentiator.
However, capacity constraints and the risk of Samsung and Micron closing the HBM gap are the primary concerns to watch.
What to watch
- Nvidia supply relationship: Any shift in Nvidia's supplier mix toward Samsung or Micron could be a key risk event.
- HBM4 development: The race to next-generation HBM is already underway. Watch for updates on SK Hynix's HBM4 readiness and whether it can maintain its lead.
- Conventional memory pricing: SK Hynix still derives meaningful revenue from standard DRAM and NAND. Spot price trends could be a gauge of the broader memory cycle.
Bottom line
TSMC, SK Hynix, Samsung, Advantest, and Tokyo Electron collectively control the chokepoints of the AI buildout.
The expected increase in AI infrastructure may support demand, but investors should weigh the risks carefully.
Geopolitical exposure, US export restrictions, and the pace of HBM competition could all move the needle.