Why Taiwan Semiconductor Manufacturing Company Limited (TSM) Is Among the Best Semiconductor Stocks with Huge Upside Potential?

Group 1 - Taiwan Semiconductor Manufacturing Company Limited (TSM) is the world's largest dedicated contract chip producer with a mid-60% market share projected for 2024 [1] - The company benefits from the global shift of semiconductor firms from integrated device manufacturers to fabless designers, assuming costs and capital expenditures for its clients [1] - TSM is expected to maintain higher gross margins than competitors due to economies of scale and premium pricing supported by innovative process technologies [2] Group 2 - Despite being a foundry leader, TSM faces pricing pressure as each generation of process technology matures and commoditizes quickly [2] - The semiconductor industry is characterized by cyclical demand, where foundries may over-add capacity during high demand, leading to underutilization and reduced profitability during recessions [1]