TSMC Just Scored a Big Win: Time to Buy the AI Stock?

Core Insights - Taiwan Semiconductor Manufacturing Company (TSMC) is the world's largest contract manufacturer, with a significant market share of 62% in third-party chip manufacturing and around 90% in advanced chip manufacturing, positioning it as a crucial player in the global economy and the AI sector [2][3] - TSMC's recent strong third-quarter results have driven its valuation above $1 trillion, highlighting the effectiveness of its global diversification strategy [2][4] - The Arizona plant has shown production yields that are 4 percentage points higher than comparable plants in Taiwan, which is significant for unlocking $6.6 billion in grants and $5 billion in loans from the CHIPS Act [4][5] Company Performance - TSMC reported a quarter with 39% revenue growth, 47.5% operating margin, and 54% growth in earnings per share, showcasing exceptional performance for a manufacturer [8] - The Arizona facility is already producing chips for Apple, indicating strong operational capabilities and potential for high margins [5][9] Competitive Landscape - The success of TSMC's Arizona plant places it ahead of competitors like Samsung and Intel, both of which are currently facing challenges [6][9] - With Nvidia's Blackwell platform sold out for the next year and high expectations for Apple's new iPhone, TSMC is well-positioned for continued strong performance in the coming quarters [9]