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This Artificial Intelligence (AI) Stock Is Quietly Outperforming Nvidia in 2025
The Motley Fool· 2025-10-07 01:02
This company is essential to the success of Nvidia and nearly every other major chipmaker.Nvidia is arguably the king of Wall Street these days. As the maker of high-performing graphics processing units (GPUs) that power artificial intelligence (AI) programs and large language models, Nvidia's stock price exploded in the last three years, up nearly 1,500%. The company now boasts a market capitalization of $4.6 trillion, making it the biggest company in the world by valuation, and it seems to be a lock to re ...
Taiwan Semiconductor Plans Ultra-Advanced Chips By 2028 With Massive Taichung Fab
Yahoo Finance· 2025-09-24 17:56
Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) stock trended on Wednesday following reports that the contract chipmaker plans to break ground on a new 1.4-nanometer fabrication plant in Taichung next quarter. The facility is expected to reach an annual production value of up to 500 billion New Taiwanese dollars ($16.49 billion), the Taipei Times reported on Wednesday citing the Central Taiwan Science Park Bureau. Hsu Maw-shin, director-general of the bureau, dismissed speculation of delays, stating that ...
4 Ways TSMC Makes Its Money
Yahoo Finance· 2025-09-21 17:07
Group 1: Market Overview - Semiconductor stocks and artificial intelligence (AI) are leading the stock market in 2025, with the S&P 500 up 12% and major semiconductor ETFs significantly outperforming the market [1] - Companies like Nvidia, Advanced Micro Devices, and Broadcom are performing well, but they rely on fabrication companies like Taiwan Semiconductor Manufacturing (TSMC) for their semiconductor needs [2] Group 2: TSMC's Role and Revenue - TSMC is the world's largest independent semiconductor foundry, producing advanced chips for major companies such as Nvidia, Apple, and Tesla, utilizing 288 different process technologies to create nearly 12,000 products in 2024 [5] - High-powered semiconductors are increasingly contributing to TSMC's revenue, with 60% of revenue coming from specialized 3nm and 5nm chips, which are critical for performance [6] - TSMC's revenue distribution has shifted, with 36% from 5nm chips and 24% from 3nm chips, compared to 30% from 7nm chips in Q2 2022 [7] Group 3: Financial Performance - TSMC reported revenues of $11.13 billion in August, marking a 33% increase year-over-year and nearly 4% growth month-over-month [8] - The company is investing $165 billion in new production facilities in Arizona to enhance domestic semiconductor fabrication and mitigate trade issues [8] Group 4: Additional Revenue Streams - Besides high-powered chips, TSMC generates revenue from smartphones, which account for 27% of its business, particularly through the production of semiconductors that enable 5G technology [9]
Nvidia's CEO Just Delivered Incredible News for Taiwan Semiconductor Manufacturing Stock Investors
The Motley Fool· 2025-09-20 09:50
Core Viewpoint - TSMC is poised to benefit significantly from the anticipated surge in global AI infrastructure spending, projected to rise from $600 billion in 2023 to $3 trillion to $4 trillion by the end of the decade [1][12]. Group 1: TSMC's Market Position - TSMC is recognized as the world's leading semiconductor contract manufacturer, essential for advanced chip production, particularly for AI applications [5][6]. - The company has a technological edge, consistently leading in shrinking node sizes, with nearly 75% of its revenue coming from chips built on nodes of 7 nanometers or smaller [7]. - TSMC's pricing power has strengthened, allowing it to increase prices while maintaining customer satisfaction, resulting in a rising gross margin [8]. Group 2: AI and Future Growth Opportunities - The demand for AI chips is expected to grow at a compound annual growth rate (CAGR) of over 40% through 2028, providing TSMC with a substantial growth runway [9]. - TSMC is also well-positioned to capitalize on emerging markets such as robotaxis, robotics, and quantum computing, which will require advanced chips [10]. - The company is actively collaborating with major customers to secure capacity and meet increasing demand for AI chips [9]. Group 3: Investment Perspective - TSMC is currently trading at a forward price-to-earnings (P/E) ratio of 23 based on analysts' 2026 estimates, making it one of the best values in the semiconductor sector [11]. - Investors are encouraged to consider TSMC as a strategic investment to capitalize on the forthcoming AI spending boom [12].
3 Dominant Artificial Intelligence (AI) Stocks That I'm Buying Now and Planning to Hold Forever
The Motley Fool· 2025-09-07 09:15
Industry Overview - The chip market, particularly in the context of artificial intelligence (AI), is expected to expand significantly over the next five years, driven by increasing data center capital expenditures projected to reach $3 trillion to $4 trillion by 2030 [1][6]. Company Analysis Nvidia - Nvidia is positioned as a primary beneficiary of the AI spending spree, with expectations that the big four AI hyperscalers will spend around $600 billion on data center capital expenditures this year [5]. - The company estimates it captures about 35% of the total spending on a data center, which positions it well for future growth as the market expands [8]. - Nvidia's graphics processing units (GPUs) are critical to the AI arms race, and its continuous innovation keeps it at the forefront of the industry [7]. Taiwan Semiconductor Manufacturing (TSMC) - TSMC is a leading chip foundry that fabricates chips for various tech companies, including Nvidia, AMD, Broadcom, and Apple, ensuring its long-term success regardless of specific technologies deployed [9]. - The company is set to launch 2nm chips later this year, which are expected to improve power consumption by 25% to 30% compared to its 3nm chipset [10]. - TSMC's innovations in energy efficiency are crucial as AI infrastructure expands, helping it maintain its leading position in the chip manufacturing sector [11]. ASML Holding - ASML is the sole manufacturer of extreme ultraviolet (EUV) lithography machines, essential for producing advanced chips, giving it a technological monopoly in the industry [12]. - The company's business is expected to grow alongside new chip factory constructions, making it a strong alternative investment in the chip space [13]. - ASML's stock is currently down approximately 30% from its all-time high, presenting a potential long-term value investment opportunity [13].
Prediction: This Unstoppable Stock Could Be the Next $2 Trillion Giant
The Motley Fool· 2025-08-31 09:00
Core Viewpoint - Taiwan Semiconductor Manufacturing Company (TSMC) is positioned for significant growth, potentially reaching a $2 trillion market cap due to its critical role in the semiconductor industry and the ongoing demand driven by AI technologies [2][14]. Group 1: Company Overview - TSMC currently has a market cap of $1.2 trillion and is one of only 19 companies worldwide with a market cap exceeding $500 billion [1]. - The company is a key chip fabricator for major tech firms like Apple and Nvidia, which design their chips in-house and rely on TSMC for production [4]. Group 2: Investment and Growth Potential - TSMC's $165 billion investment in its Arizona facility enhances its attractiveness as a partner, with production capacities reportedly sold out through 2027 [5]. - The company is expected to achieve a 45% compound annual growth rate (CAGR) in AI-related chip revenue over the next five years starting in 2025, with overall revenue projected to grow nearly 20% [13]. Group 3: Technological Advancements - TSMC is advancing its technology with the introduction of 2nm chips, which are anticipated to consume 25% to 30% less power than 3nm chips, making them ideal for energy-intensive AI workloads [7][8]. - The company is also developing A16 and A14 chips aimed at improving energy consumption [8]. Group 4: Market Position and Valuation - Despite a revenue growth rate of 44% in Q2, TSMC trades at a valuation similar to the broader market, with a forward earnings ratio of 23.9 compared to the S&P 500's 23.7 [10][12]. - TSMC's stock is not currently valued at a premium despite its rapid growth, indicating potential for future appreciation as market recognition increases [10][12].
摩根士丹利:台积电-依据 2025 年第二季度财报买入;增持评级
摩根· 2025-07-15 01:58
Investment Rating - The report maintains a "Buy" rating for TSMC, with an "Overweight" (OW) stance, suggesting accumulation ahead of the earnings print due to low expectations [1][6]. Core Insights - TSMC's preliminary revenue for 2Q25 was NT$933 billion, reflecting an 11% quarter-over-quarter (Q/Q) increase in TWD, translating to approximately US$29.6 billion, which is a 16% Q/Q increase in USD, exceeding both the company's guidance and Morgan Stanley's estimates [2][3]. - The likelihood of TSMC raising its full-year revenue guidance has increased, with expectations of a 27% year-over-year (Y/Y) growth in USD, driven by strong AI demand and tight leading-edge capacity [3][13]. - The report highlights that TSMC's fab utilization in the second half of 2025 remains robust despite lukewarm demand in smartphones and PCs, indicating a potential shift in demand dynamics [3][13]. Revenue and Earnings Guidance - TSMC is expected to raise its 2025 full-year revenue guidance from mid-20% to high-20% due to strong AI demand, with 3Q25 revenue projected to increase by 1% Q/Q in USD [17][18]. - The report forecasts a gross margin decline to 55.6% in 3Q25, with TWD revenue potentially decreasing by nearly 4% Q/Q due to TWD appreciation [15][17]. - The preliminary EPS estimate for 2Q25 is NT$14.40, with a gross margin around 57% [17]. Price Target and Valuation - The price target for TSMC remains NT$1,288, implying a 17% upside from the current share price of NT$1,100 [6][56]. - TSMC is trading at 17x the estimated EPS for 2026, which is considered attractive, with expectations of a re-rating to 20x due to increased bargaining power and sustainable AI demand [18][56]. Market Dynamics and Demand Drivers - The report notes that TSMC's wafer pricing strategy may be influenced by FX impacts, with expectations of a 3-5% price hike in 2026 due to strong demand and TWD appreciation [26][30]. - AI demand is projected to significantly contribute to TSMC's revenue, with expectations that cloud AI revenue will grow from 13% in 2024 to 34% by 2027 [37][40]. Semiconductor Tariffs and Regulatory Environment - The report discusses the potential for TSMC to receive an exemption from semiconductor tariffs due to its significant investment in US production, which could mitigate revenue risks associated with such tariffs [4][25].
Prediction: Taiwan Semiconductor Manufacturing Stock Is the Safest AI Chip Bet
The Motley Fool· 2025-07-13 16:47
Core Viewpoint - Taiwan Semiconductor Manufacturing Company (TSMC) is a crucial player in the AI chip manufacturing space, serving as a reliable partner for AI chipmakers despite not designing chips itself [1][7]. Group 1: TSMC's Market Position - TSMC is recognized as the world's most advanced semiconductor foundry, with major clients including Nvidia, AMD, Broadcom, and Apple, giving it unmatched scale and technological leadership [2]. - The company has a significant market share lead in the advanced node market, outperforming competitors like Intel and Samsung [2]. Group 2: Revenue and Growth - In Q1, TSMC's revenue increased by 35% to $25.5 billion, driven by high-performance computing (HPC) growth, and preliminary Q2 revenue is estimated to have risen by 39% to $31.9 billion [4]. - Chips manufactured on 7nm and smaller nodes accounted for 73% of TSMC's revenue in Q1, up from 65% the previous year, with 3nm nodes contributing 22% [3]. Group 3: Pricing Power and Margins - TSMC's strong pricing power is evident as it raises prices to counteract margin dilution from new fabs, with gross margin rising by 190 basis points to 58.8% in Q1 [4][5]. - The company plans to increase AI chip prices, with Arizona-made chips potentially commanding a 30% premium [5]. Group 4: Future Growth Prospects - TSMC anticipates AI-related revenue to grow at a mid-40% compounded average growth rate (CAGR) over the next five years starting in 2024 [8]. - The company is also positioned to benefit from the growth of autonomous driving and robotaxis, which will require advanced chips [9]. Group 5: Investment Appeal - TSMC is viewed as a safe investment in the AI semiconductor space, as it provides manufacturing services to all major players without needing to bet on a single chipmaker [11]. - The stock is attractively valued, trading at a forward P/E ratio of 24 based on 2025 estimates and a PEG ratio of less than 0.7, indicating it is undervalued [12].
4 Reasons to Buy Taiwan Semiconductor Manufacturing Stock Like There's No Tomorrow
The Motley Fool· 2025-05-25 09:30
Core Viewpoint - Taiwan Semiconductor Manufacturing Company (TSMC) is positioned as a top stock pick due to its strategic moves to mitigate geographical risks and its ability to meet the growing demand for chips through new technology rollouts [1][2]. Group 1: Global Footprint Expansion - TSMC is diversifying its global footprint to address risks associated with tariffs and potential geopolitical tensions, with a $65 billion facility in the U.S. and an additional $100 billion investment for further production capacity [5][6]. - The company is also establishing facilities in Germany and Japan, which reduces reliance on Taiwan for revenue generation [5][6]. Group 2: Technological Advancements - TSMC is set to launch 2nm and 1.6nm chips in late 2025 and 2026, respectively, which promise significant improvements in power consumption—20% to 30% for 2nm and 15% to 20% for 1.6nm compared to 3nm chips [8]. - The reduction in power consumption is expected to drive demand, particularly from data centers looking to lower operational costs [9]. Group 3: Growth Projections - TSMC's management anticipates a 45% compound annual growth rate (CAGR) for AI-related chip revenue over the next five years, with overall revenue CAGR expected to approach 20% [10]. - If TSMC meets its revenue growth projections, it could see a nearly 150% increase in revenue over five years, making it a compelling investment opportunity [11]. Group 4: Stock Valuation - TSMC's stock is currently trading at just under 21 times forward earnings, which is cheaper than the S&P 500's approximately 22 times forward earnings, indicating that the stock is not priced at a premium despite its growth potential [12][14]. - This valuation suggests that investors can buy TSMC stock with confidence, as it is aligned with market averages [14].
The AI boom is just getting started; 2 stocks set to soar
Finbold· 2025-05-22 14:07
Core Insights - The AI revolution is benefiting not only major tech companies like Microsoft and Nvidia but also semiconductor firms such as Taiwan Semiconductor Manufacturing Company (TSMC) and Innodata [1] Group 1: Taiwan Semiconductor Manufacturing Company (TSMC) - TSMC is the largest contract chipmaker globally, holding approximately 90% of the market share and collaborating with major companies like Nvidia, AMD, Broadcom, and Qualcomm [4] - The company has experienced a growth of +264.15% over the past five years, with its pure-play foundry market share projected to reach 66% by the end of 2025, driven by demand for 3nm and 5nm chips [5] - TSMC's sales increased by 42% last month, with its products being utilized in data centers, smartphones, and electric vehicles, and predictions suggest a potential stock increase of +30.89% in the next year [6] Group 2: Innodata - Innodata specializes in data engineering services and provides annotated data essential for training AI models across technology, finance, and healthcare sectors [9] - The company has established partnerships with five of the "Magnificent Seven," leading to a revenue surge of 96%, and the rise of specialized large language models presents further opportunities [10] - Estimates indicate that Innodata's stock could see an increase of +121.30% in the next 12 months [10] Group 3: Industry Outlook - Both TSMC and Innodata are positioned to become increasingly integral to the AI ecosystem, with TSMC manufacturing advanced chips and Innodata supplying necessary data for training new language models [11]