TSMC(US:TSM) The Motley Fool·2025-07-16 09:30Core Viewpoint - Taiwan Semiconductor Manufacturing Company (TSMC) is positioned as a leading player in the artificial intelligence (AI) sector, providing significant returns to investors and achieving new all-time highs in stock performance [1][2]. Company Positioning - TSMC operates as a chip foundry, producing chips for various companies involved in the AI race, including major clients like Nvidia, Tesla, Broadcom, and Apple [4]. - The company is not in competition with its customers, as it does not sell its own products, which alleviates concerns regarding intellectual property conflicts [5]. Technological Advancements - TSMC is recognized for being a pioneer in launching cutting-edge technologies, with its 3-nanometer (nm) chip node achieving high production yields [6]. - The company plans to introduce a 2nm node later this year and a 1.6nm node next year, ensuring continuous innovation and client retention [6]. Growth Metrics - TSMC has experienced rapid growth, with a year-to-date revenue increase of 40% year over year, indicating strong expansion despite a competitive market [11]. - The company reported a 26.9% revenue increase in June, following strong results in the preceding months [10]. Market Comparison - TSMC is the ninth-largest company globally and is growing at a rate comparable to Nvidia, which is notable for a company of its size [13]. - Management anticipates a five-year compound annual growth rate (CAGR) approaching 20%, suggesting sustained growth in the future [13]. Investment Sentiment - TSMC is viewed as a top stock for long-term investment, capitalizing on the AI race and maintaining strong sales to both Nvidia and potential competitors [14].