Key Points TSMC is the world’s largest and most advanced contract chipmaker. ASML provides the lithography tools that enable TSMC to produce those chips. One of these linchpins faces more headwinds than the other. 10 stocks we like better than Taiwan Semiconductor Manufacturing › TSMC (NYSE: TSM) and ASML (NASDAQ: ASML) are both linchpins of the semiconductor market. Taiwan Semiconductor Manufacturing (TSMC) is the world's largest and most advanced contract chipmaker. ASML is the largest producer ...

Group 1: Nvidia - Nvidia's stock has seen significant growth due to the artificial intelligence arms race, with $500 billion in orders for data center GPUs through the end of 2026 [3][4] - The company generated $165 billion in revenue over the past 12 months, indicating strong financial performance [4] - Nvidia's growth potential makes it an attractive buy, especially with anticipated massive buying before the end of the year [4] Group 2: Taiwan Semiconductor - Taiwan Semiconductor (TSMC) is the leading chip foundry and will benefit from increased chip demand driven by Nvidia and its competitors [5][6] - TSMC's new 2nm chip technology entering production is expected to reduce power consumption by 25% to 30%, enhancing efficiency for data centers [6][7] - The company is well-positioned to capitalize on the ongoing AI arms race, with expectations of soaring sales through 2025 and 2026 [7] Group 3: Amazon - Amazon is currently lagging behind other big tech peers in performance, but it continues to show growth potential [6]

Core Viewpoint - Taiwan Semiconductor Manufacturing Company (TSMC) is identified as a leading investment opportunity in the AI sector due to its critical role in the AI computing industry and its strong financial performance [1][2][6]. Company Overview - TSMC is the world's largest chip foundry by revenue, serving as a neutral supplier for various clients, which mitigates concerns about reverse-engineering [4]. - The company has a diverse client base, including major tech firms like Nvidia, AMD, and Apple, indicating its integral role in high-tech devices [5][6]. Market Position - TSMC is positioned as a key player in the AI arms race, essential for computing equipment providers who rely on its chip manufacturing capabilities [3][6]. - The company is currently addressing significant challenges in AI, such as power consumption, by developing advanced chip technology [8][10]. Financial Performance - In the third quarter, TSMC reported a 41% year-over-year revenue increase in U.S. dollars, surpassing expectations [11]. - The company is projected to achieve a compound annual growth rate (CAGR) of 20% from now until 2030, leading to a total revenue growth of 148% [12]. Future Growth Potential - The global data center capital expenditure is expected to rise significantly, from $600 billion this year to $3 trillion to $4 trillion by 2030, indicating a robust market for TSMC's products [11]. - TSMC's new 2nm chip technology is anticipated to reduce power consumption by 25% to 30%, contributing to its growth and addressing energy concerns in the AI sector [10]. Valuation - TSMC is valued at 24 times its projected 2026 earnings, which is not excessively high compared to its tech peers, suggesting potential for stock growth if it maintains its margins [12][13].

Core Insights - Taiwan Semiconductor Manufacturing Company (TSMC) is expanding into 2nm nodes to meet the growing demand for efficient AI chips [1][3] - The company is investing in multiple phases to expand its 2nm fabrication facilities in Hsinchu, Kaohsiung, and Arizona [1][8] - Initial production costs for 2nm chips are high, leading to a temporary gross margin drop, estimated at around 2% and potentially expanding to 3-4% until production scales [2][4][8] Company Strategy - TSMC aims to achieve economies of scale and significant energy efficiency as it scales its 2nm production, which is expected to enhance its technology lead in the long run [3][4] - The company is relying on scale, automation, and government incentives to close the cost gap associated with initial production [4][8] Competitive Landscape - Competitors like Intel and GlobalFoundries are also expanding in AI chip manufacturing, with Intel focusing on its 18A process for 1.8nm chips [5] - GlobalFoundries is targeting mature nodes but is seeing some demand in AI-related applications, particularly in edge computing [6] Financial Performance - TSMC's shares have increased approximately 54.5% year-to-date, outperforming the Zacks Computer and Technology sector's gain of 30.9% [7] - The company trades at a forward price-to-earnings ratio of 25.57, which is lower than the sector average of 30.75 [9] - The Zacks Consensus Estimate indicates a year-over-year earnings increase of 44.9% for 2025 and 20.4% for 2026, with upward revisions in estimates over the past 30 days [10]

Core Viewpoint - The article discusses the potential for Taiwan Semiconductor Manufacturing Company (TSMC) to join the exclusive $3 trillion valuation club by 2029, currently occupied by Nvidia, Apple, Microsoft, and Alphabet, given its current valuation of $1.5 trillion [1][2]. Group 1: Company Positioning - TSMC is the world's leading contract chip manufacturer and plays a critical role in the AI supply chain, supplying chips to major companies like Nvidia, AMD, and Broadcom [4]. - The company is expanding its global footprint to mitigate risks associated with its location near mainland China, with a significant $165 billion investment in the U.S. to build several chip fabrication sites [6]. Group 2: Technological Advancements - TSMC is addressing the energy crisis associated with AI data centers by launching 2nm chips, which are expected to consume 25% to 30% less power than the previous 3nm generation when running at the same speed [7]. - The introduction of these 2nm chips is anticipated to support the growth of AI hyperscalers, despite the higher costs associated with the new technology [9].

Key Points Taiwan Semiconductor (TSMC) is launching a new, energy-efficient chip node. TSMC delivered massive revenue growth during Q3 and projects more during Q4. It should remain an integral player in the AI arms race for a long time to come. 10 stocks we like better than Taiwan Semiconductor Manufacturing › Artificial intelligence (AI) investing is growing increasingly difficult. Until now, Nvidia has been the undisputed king of AI computing hardware, but recent client win announcements from A ...

Core Insights - Nvidia has launched the first U.S.-made Blackwell wafer, essential for AI chips, at TSMC's facility in Phoenix, Arizona [1][2] - The introduction of the Blackwell wafer is a strategic response to the increasing demand for AI chips, with the wafer being a foundational component for semiconductors [2] - TSMC's Arizona facility will produce advanced technologies, including chips with sizes of two, three, and four nanometers, which are critical for AI and high-performance computing [3] Industry Context - Nvidia's CEO, Jensen Huang, described the launch as a "historic moment," marking a significant milestone in U.S. semiconductor manufacturing [3] - The initiative aligns with the vision of reindustrialization in the U.S., aiming to bring manufacturing jobs back to America [4] - Despite the progress, the U.S.-made Blackwell wafer will still require advanced packaging in Taiwan, indicating that full domestic production is not expected for another two years [5] Competitive Landscape - The announcement follows Taiwan's rejection of a proposal for a 50-50 split in semiconductor production between the U.S. and Taiwan, highlighting ongoing structural challenges in the U.S. chip ecosystem [6] - Additionally, Apple has secured a significant portion of TSMC's 2nm chip production capacity, creating a competitive advantage while mitigating risks associated with potential tariffs [7] - Year-to-date, Nvidia and TSMC's shares have seen substantial increases of 32.47% and 46.38%, respectively, reflecting positive market sentiment [7]

Core Insights - Nvidia has seen a stock price increase of nearly 1,500% over the last three years, with a current market capitalization of $4.6 trillion, making it the largest company by valuation [2] - Taiwan Semiconductor Manufacturing Company (TSMC) is essential to Nvidia's success and has outperformed Nvidia in stock gains this year, with a 45% increase compared to Nvidia's 41% [3][5] Company Overview - TSMC is the largest semiconductor fabricator globally, producing chips for major companies like Nvidia, Broadcom, AMD, Apple, and Tesla [4] - TSMC's primary revenue source comes from manufacturing 3-nanometer and 5nm chips, accounting for 60% of its revenue [9] Financial Performance - TSMC reported second-quarter revenue of $30.07 billion, a 44.4% increase year-over-year, with a net profit margin of 42.7% [12] - The company projects next quarter's revenue to be between $31.8 billion and $33 billion [12] Market Position - TSMC holds a 70% market share in the foundry market, providing a significant competitive advantage [14] - The semiconductor industry is valued at $600 billion and is expected to reach $1 trillion annually by 2030, indicating substantial growth potential for TSMC [14] Investment Considerations - TSMC offers a dividend yield of 1.2% with a payout of $3.34 per share, compared to Nvidia's minimal annual payout of $0.04 [15] - TSMC is considered a more attractively valued stock than Nvidia, making it a favorable investment option [5][16]

Core Viewpoint - Taiwan Semiconductor Manufacturing Co. (TSMC) is set to begin construction on a new 1.4-nanometer fabrication plant in Taichung, expected to significantly boost production capacity and value, with plans to produce chips by 2028 [1][3]. Group 1: New Facility Details - The new facility, named Fab 25, will utilize 1.4nm technology, surpassing the previously planned 2nm process, and is projected to have an annual production value of up to 500 billion New Taiwanese dollars ($16.49 billion) [1][3]. - The construction of Fab 25 is scheduled to start in the fourth quarter, with the facility expected to create approximately 4,500 jobs [2][3]. Group 2: Expansion Plans - In addition to the Taichung facility, TSMC plans to build an advanced technology facility in Tainan's Shalun District and expand advanced packaging capacity in Chiayi County's Taibao City [4]. - The company is also preparing to commercialize 2nm chips next quarter in Hsinchu and Kaohsiung, with 1.6nm production planned for the second half of 2026 [3]. Group 3: Market Performance - TSMC's stock has increased by 41% year-to-date, outperforming the PHLX Semiconductor Index, which has gained 26% [4]. - The company's strong position as a key supplier to major clients like Nvidia and Apple has solidified its global presence across the U.S., Germany, and Japan [4].

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]