According to foreign media reports, TSMC is facing the risk of losing its position as the largest company in Asia by market value, which is likely to be replaced by Tencent as investors focus on Tencent's AI plans.

Since the beginning of this year, TSMC's stock price has fallen by 11%, along with global chip stocks such as Nvidia, as the market becomes increasingly concerned about the overvaluation of the chip industry. At the same time, Tencent's share price rose by about 30% in 2025, which narrowed the market value gap between the Internet giant and TSMC to about $109 billion, the smallest gap since the end of 2023.

On Wednesday, after announcing its fastest revenue growth rate since 2023, Tencent formulated a plan to significantly increase its spending on artificial intelligence infrastructure.

In addition, the financial report released this week showed that Tencent's quarterly revenue growth rate reached a new high since 2023, while announcing a significant increase in investment in artificial intelligence infrastructure. Market analysis suggests that as the commercialization of generative AI technology accelerates, Tencent's layout in areas such as computing power resources and algorithm models is forming new growth poles.

At the same time, data on capital flow reveals the pressure faced by TSMC: since February 24th, global funds have sold TSMC stocks worth approximately $5.8 billion, and foreign ownership has dropped to 72.7%, the lowest level since the end of 2023. In contrast, tracking the continuous inflow of funds from Tencent's Hong Kong Stock Connect reflects investors' expectations for the AI transformation of Chinese technology giants.

Although Tencent's stock price is still 40% lower than its peak in 2021, its strategic transformation pace has significantly accelerated compared to most Chinese technology peers. If the transformation of AI technology exceeds expectations and coupled with the recovery of the semiconductor cycle, this Asia market value throne battle spanning hardware and software may take a dramatic turn.

However, whether TSMC can maintain its crown position depends not only on the advancement speed of 3nm/2nm advanced processes, but also on the valuation reconstruction logic of the "soft" and "hard" forces under the AI wave.

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