Is TSMC Shariah-compliant?

Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s largest chipmaker and a key supplier for companies like Nvidia and Apple. As a major player in the global financial products landscape, TSMC has become increasingly relevant to Islamic banks and investment funds looking for Shariah-compliant opportunities in the Middle East and beyond. In the third quarter of 2025, TSMC’s net profit grew by 39.1%, thanks to strong global demand for AI chips.

TSMC’s net profit reached NT$452.3 billion ($14.76 billion), beating analyst expectations and rising well above last year’s NT$325.2 billion ($10.61 billion). Revenue also grew nearly 30% to NT$989.9 billion ($32.31 billion), with strong profit margins maintained and total assets continuing to rise, attracting attention from shariah-screened investment funds and Islamic scholars focused on ethical finance products.

A Global Chipmaking Powerhouse

TSMC, founded in 1987, introduced the pure-play foundry model by making chips for clients rather than producing its own products. This shift helped global tech leaders innovate more quickly and at a larger scale.

Today, TSMC (NYSE: TSM) is listed on both the Taiwan and New York Stock Exchanges, with a market value over $700 billion. This puts it among the world’s ten most valuable companies, and it continues to deliver steady profits.

With advanced manufacturing technology and a near-monopoly in high-end chip production, TSMC plays a major role in the global AI and electronics markets.

TSMC’s strong partnerships with Nvidia, Apple, AMD, and Qualcomm have made it a key part of the global supply chain. It produces chips for devices like smartphones, self-driving cars, and advanced data centers that power artificial intelligence.

So... Is TSMC a Halal investment?

As the AI boom reshapes global markets, TSMC’s growth reflects both innovation and values. For Muslim investors, the company is confirmed to follow Shariah rules based on AAOIFI standards, making it a top halal tech investment today.

Confirmed Halal Under AAOIFI Standards

Recent Shariah screening confirms that TSMC is halal-compliant according to AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions) guidelines.

The review found that:

• TSMC’s core business, semiconductor manufacturing, involves no prohibited (haram) business activities such as alcohol, gambling, or interest-based financial services that are often present in conventional banking and conventional finance.
• Its interest-bearing debt and income remain well within AAOIFI’s permissible thresholds (below 30% and 5%, respectively), addressing concerns about paying interest and interest-based income that are prohibited under Shariah law.
• The company has a clear and fair governance structure. It follows the principles of Islamic finance, which include fairness, integrity, and shared value. Its compliance is regularly reviewed by Islamic scholars who assess its financial products, expense ratio, and shariah-screened status to ensure ongoing suitability for halal investment funds and Islamic banks.

This confirmation puts TSMC among the few global tech companies that meet Islamic investment standards, which is rare in the semiconductor industry.

Why TSMC Matters for Halal Portfolios

For Muslim investors, halal investing is about more than just profit. It means making sure every financial decision reflects both ethical integrity and religious values.

TSMC’s business model fits the asset-based and riba-free principles of Islamic finance. Its focus on innovation and productivity makes it a strong choice for investors who want to join the fast-growing AI economy with a long-term investment strategy that avoids conventional bonds and interest-based finance products.

The semiconductor industry supports many areas, including AI, data centers, electric vehicles, and smart cities. TSMC enables you to invest in technology while remaining true to your values.

Shariah-Compliant Investment Tools Are Expanding

TSMC’s halal status highlights the growth of Islamic finance tools, such as screening platforms like Tabadulat, Zoya, and Musaffa. These tools help investors build portfolios that are both profitable and aligned with their ethical and spiritual values.

Faith-based investors now have access to halal stocks, Sukuk bonds, and Shariah-compliant ETFs, helping them balance growth with long-term financial security.

Investing in AI the Halal Way

AI-driven investments bring both opportunities and challenges for Muslim investors, as many tech companies have issues with interest or non-halal revenue. TSMC stands out as a Shariah-compliant way to enter the growing semiconductor and AI market.

With global demand for chips rising, especially for generative AI, TSMC’s leadership is crucial. Gartner predicts the market will be worth over $14 billion by the end of 2025, and TSMC remains central to ethical, innovation-driven investing.

Key takeaway:

TSMC’s business model, financial ratios, and ethical practices meet AAOIFI Shariah standards, confirming its halal status. For Muslim investors seeking to balance faith, innovation, and growth, TSMC offers a strong opportunity to join the AI-driven future in a halal way.

FAQS

Who owns TSMC?

TSMC is a publicly traded company with dispersed ownership. The largest single shareholder is Taiwan’s National Development Fund.

Why is TSMC #1 in chips?

It leads because it is the most advanced semiconductor foundry. It manufactures cutting-edge chips, such as those at 3 nm. It serves tech leaders such as Apple and Nvidia.

Is TSMC a good stock to buy?

It depends on the value and your willingness to take risks. However, its strong position, good profit margins, and growing demand for AI make many analysts optimistic.

Which is bigger, TSMC or Nvidia?

Nvidia's market cap has recently surpassed TSMC's. Nvidia is now valued at around $4 trillion, while TSMC is worth between $1.2 and $1.6 trillion.

Is TSMC Halal?

Yes, current financial statements show that TSMC meets Shariah-compliance standards under AAOIFI guidelines.

Who is NVIDIA’s biggest supplier?

TSMC is among Nvidia’s top suppliers (manufacturing its chips), making it a critical supplier in Nvidia’s supply chain.