The Motley Fool·2025-05-04 09:05Core Viewpoint - The semiconductor market is experiencing a pullback due to tariffs, trade wars, and recession fears, but this creates attractive buying opportunities for long-term investors as the market is expected to grow significantly over the coming decades [1][2]. Group 1: TSMC - TSMC is the largest and most advanced contract chipmaker, relied upon by major companies like Nvidia, AMD, Qualcomm, and Apple for producing high-performance chips [4][5]. - In the latest quarter, TSMC generated 59% of its revenue from the high-performance computing (HPC) market and 28% from the smartphone market, with HPC growth offsetting smartphone market softness [5]. - TSMC's revenue is expected to grow at a compound annual growth rate (CAGR) of 21% from 2024 to 2027, with earnings per share (EPS) expected to grow at a CAGR of 22% [8]. Group 2: ASML - ASML is the largest producer of lithography systems and the only producer of extreme ultraviolet (EUV) lithography systems, essential for manufacturing advanced chips [9][10]. - ASML's low-NA EUV systems cost approximately $180 million each, while high-NA systems cost around $380 million, giving the company significant pricing power [10]. - Analysts expect ASML's revenue and EPS to grow at a CAGR of 12% and 19%, respectively, from 2024 to 2027 [11]. Group 3: Arm Holdings - Arm designs power-efficient CPUs, which are widely used in smartphones, tablets, IoT devices, and connected vehicles, capturing about 99% of the smartphone market [13][14]. - Arm plans to develop its own first-party chips, which could enhance its competitiveness and reduce costs by eliminating licensing fees [15]. - From fiscal 2024 to fiscal 2027, Arm's revenue is expected to grow at a CAGR of 23%, while EPS is projected to grow at 81% [16].