TSMC: Why This Semiconductor Giant Looks Like a Massive Bargain Right Now

Core Viewpoint - TSMC is positioned to benefit from the significant growth of the global semiconductor market, which is projected to reach $2 trillion in annual revenue by 2032, more than triple the $656 billion generated last year [2][3]. Company Position and Market Share - TSMC holds a dominant position in the foundry market with an estimated share of 67%, which has increased by six percentage points in 2024, while Samsung's share has decreased to 11% [4]. - The company's technological advantage, particularly its advanced 3-nanometer process node, allows it to manufacture powerful and efficient chips, attracting major clients like AMD, Apple, and Nvidia [5][6]. Future Growth and Investments - TSMC plans to start mass production of its 2-nanometer processors in the second half of this year, potentially outpacing competitors like Samsung and Intel [7]. - The company has committed to investing $165 billion in the U.S. to establish advanced chip manufacturing facilities aimed at supporting AI applications [7][8]. - TSMC's strategy to diversify its manufacturing presence globally is expected to mitigate risks from trade-related conflicts [8]. Financial Performance - TSMC reported $90 billion in revenue for 2024, a 30% increase from the previous year, and a 42% revenue jump in Q1 2025 to $25.6 billion, exceeding market expectations [10]. - The company anticipates maintaining an annual revenue growth rate of 20% over the next five years, supported by a total addressable market of nearly $250 billion in foundry and packaging services [11][12]. - TSMC's current trading multiples of 22 times trailing earnings and 17 times forward earnings present a favorable valuation compared to the Nasdaq-100 index's forward earnings multiple of 27 [12].