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].