Microsoft CEO Satya Nadella said last year that as much as 30% of Microsoft’s code was being written by artificial intelligence (AI). I can only imagine that number is higher now.
Humans are still definitely needed to maintain quality, a fact proved by Microsoft appointing Charlie Bell, former head of the company’s security business, to now focus exclusively on maintaining the quality of the company’s products. He reports directly to Nadella.
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Microsoft clearly doesn’t plan on cutting the amount of its code written by AI. Nadella himself said it was steadily increasing, and CTO Kevin Scott predicted that by 2030, 95% of the company’s code might be written by AI.
With that in mind, what is the best way to play AI becoming a permanent part of the IT industry? By my math, one of the best single-ticker ways to play it is Taiwan Semiconductor Manufacturing(NYSE: TSM).
Taiwan is where a full 60% of all the world’s semiconductor chips are produced.
But the country’s footprint is even bigger than that implies because 90% of the world’s advanced semiconductor chips, those 7 nanometers (nm) or smaller, are produced in Taiwan.
And those are the chips you need to run the high-end AI programs Microsoft and others are using to write their code.
Microsoft uses a lot of Nvidia hardware to run its AI. So does pretty much everyone else. IOT Analytics reports that Nvidia controls 92% of the data center GPU market. Its nearest competitor is Advanced Micro Devices at 4%.
But those Nvidia graphics processor units (GPUs) are manufactured by Taiwan Semiconductor. So are its competitor AMD’s, along with Apple, Broadcom, Qualcomm and others, either in whole or in part.
In fact, Nvidia’s top-of-the-line Blackwell chip is produced at a Taiwan Semiconductor factory in Arizona.
The semiconductor chip market, and by extension the AI data center hardware market, simply does not exist without Taiwan Semiconductor, which doesn’t design any of the chips it produces.
Taiwan Semiconductor is a “pure foundry” company. All it does is produce chips on contract. But it’s utterly dominant in the space, with 72% market share as of Q3 2025. Samsung is in second place with 7%.
You’ve heard of pick-and-shovel plays, I’m sure. But Taiwan Semiconductor is thepick-and-shovel play for the AI industry and the tech industry more broadly.
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