Intel vs. Taiwan Semiconductor Manufacturing: Which Stock Will Outperform in 2026?

• TSMC is the undisputed person successful manufacturing precocious chips.

• Intel's banal outperformed successful 2025 aft the institution was backed by immoderate large investors.

• TSMC has a clearer maturation way betwixt the 2 companies.

• 10 stocks we similar amended than Intel ›

When it comes to spot manufacturing, Taiwan Semiconductor Manufacturing (NYSE: TSM) is the undisputed foundry leader, portion Intel (NASDAQ: INTC) is trying to marque inroads. However, successful 2025, it was Intel's banal that outperformed, up astir 80% arsenic of this writing, compared to a 40% summation for Taiwan Semiconductor Manufacturing.

Let's look astatine which banal is acceptable up to outperform successful 2026.

Taiwan Semiconductor Manufacturing, oregon TSMC for short, is the world's largest semiconductor foundry connected the planet. Due to its technological expertise and scale, the institution manufactures the immense bulk of precocious chips, specified arsenic graphics processing units (GPUs). It counts Nvidia, Apple, and Broadcom among its apical customers.

In spot manufacturing, the extremity is to consistently propulsion down node sizes, which refers to the transistor density of the chips. The much transistors that tin beryllium acceptable connected a chip, the much almighty and vigor businesslike they become. However, producing precocious chips astatine standard is difficult, and TSMC's main competitors, including Intel and Samsung, person struggled with yields (the fig of defects per wafer). Meanwhile, astir three-quarters of its accumulation is astatine 7nm nodes and below, and it is acceptable to determination to 2nm exertion adjacent year.

Given its presumption successful the industry, TSMC is the go-to spouse for spot designers. It works intimately with companies similar Nvidia to turn capableness to conscionable their projected demand. And, arsenic the lone foundry that tin truly marque these precocious chips astatine standard with precocious yields, it has besides garnered beardown pricing power. The institution is acceptable to rise prices erstwhile again adjacent year, portion the outgo of its caller 2nm processing exertion is forecasted to beryllium 50% higher than its 2nm technology.

TSMC is well-positioned to proceed to payment from the ongoing artificial quality (AI) infrastructure buildout and sees AI spot request increasing by much than a 40% compound yearly maturation complaint (CAGR) implicit the adjacent fewer years.

Intel stock's outperformance successful 2025 wasn't truly a effect of its operational performance. The institution has struggled to turn its revenue, and it felt a batch of gross borderline unit successful the archetypal fractional of the year. However, it did spot a immense rebound successful adjusted gross margins successful Q3, with it climbing from 18% a twelvemonth agone to 40%. Revenue, meanwhile, edged up 3%.