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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 ...
TSM Soars 18% in a Month: Should You Buy, Sell or Hold the Stock?
ZACKS· 2025-10-06 13:11
Key Takeaways TSM shares jumped 18.2% in a month, topping peers and trading near a 52-week high.AI chip sales tripled in 2024 and are expected to double again in 2025, fueling TSM's growth.Soft PC and smartphone demand and higher fab costs pose short-term challenges for TSM.Taiwan Semiconductor Manufacturing Company (TSM) , also known as TSMC, shares have rallied 18.2% over the past month, outperforming the Zacks Computer and Technology sector’s gain of 6.3%.TSM stock has also outperformed major semiconduct ...
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]
Taiwan Semiconductor Stock Soars 18% YTD: Time to Hold or Book Profit?
ZACKS· 2025-08-06 15:01
Core Viewpoint - Taiwan Semiconductor Manufacturing Company (TSMC) has shown strong performance in a volatile market, achieving a 17.7% year-to-date gain, outperforming the broader Zacks Computer and Technology sector which rose 10.9% [1][4]. Performance Comparison - TSMC's stock has outperformed several peers, including ASML Holding, ON Semiconductor, and Marvell Technology, which have seen declines of 0.5%, 25.1%, and 30.6% year-to-date, respectively [2]. AI Boom and Growth Potential - The ongoing AI boom positions TSMC as a key player in a multi-year growth cycle, with AI-related revenues tripling in 2024 and expected to double again in 2025, achieving a 40% compound annual growth rate over the next five years [5][7]. - TSMC is investing between $38 billion and $42 billion in capital expenditures for 2025, focusing 70% on advanced manufacturing processes to meet rising AI chip demand [8][11]. Financial Performance - In Q2 2025, TSMC's revenues surged 44% year-over-year to $30.07 billion, with EPS increasing by 61% to $2.47, driven by demand for 3nm and 5nm chips [12][10]. - TSMC raised its revenue growth guidance for full-year 2025 to 30%, up from mid-20% projections, with Q3 revenue expectations between $31.8 billion and $33 billion [13]. Valuation - TSMC's stock trades at a forward 12-month price-to-earnings (P/E) multiple of 22.27, lower than the sector average of 27.47, making it appealing for long-term investors [15]. Near-Term Challenges - TSMC faces near-term challenges, including a 25% electricity price hike in Taiwan, softness in key markets like PCs and smartphones, and higher costs associated with global expansion [18][19][20]. - Geopolitical tensions, particularly U.S.-China relations, pose strategic risks due to TSMC's significant revenue exposure to China [21]. Conclusion - TSMC remains a cornerstone of the semiconductor industry with strong capabilities in advanced chip manufacturing and exposure to AI demand, but short-term headwinds suggest a cautious approach, recommending a hold position for now [22].
NVDA vs. TSM: Which Semiconductor Stock Is the Better AI Investment?
ZACKS· 2025-07-18 13:25
Core Insights - NVIDIA and Taiwan Semiconductor Manufacturing Company (TSMC) are pivotal in the global AI chip supply chain, with NVIDIA focusing on GPU design and TSMC on chip manufacturing [1][2] NVIDIA Analysis - NVIDIA's data center revenues surged 73% year-over-year to $39.1 billion in Q1 FY2026, driven by strong demand from cloud providers and enterprises [3] - The adoption of NVIDIA's Hopper 200 and Blackwell GPU platforms is accelerating, with expectations for higher performance from upcoming versions [4] - However, NVIDIA faces challenges from U.S. export restrictions, resulting in an estimated loss of $2.5 billion in H20 chip sales to China in Q1 and an anticipated $8 billion in Q2 [5][6] Taiwan Semiconductor Analysis - TSMC manufactures chips for major tech companies and has advanced to 3nm production, with plans for 2nm soon, positioning itself well to meet rising AI chip demand [7] - TSMC reported a 39% revenue increase and a 61% profit jump in Q2 2025, with AI-related revenues tripling in 2024 and expected to double in 2025 [8][11] - The company raised its FY2025 revenue growth guidance to 30% and plans to invest up to $42 billion in advanced manufacturing [9][10] Financial Performance Comparison - NVIDIA's EPS is projected to grow 42.1% in FY2026 and 32.1% in FY2027, with recent upward revisions indicating strong confidence [12] - TSMC's EPS is expected to grow 34.7% in 2025 and 15.2% in 2026, with upward trends in estimates over the past month [15] - Year-to-date, NVIDIA shares have increased by 28.9%, while TSMC shares have risen by 24.1% [18] Valuation Insights - TSMC's price-to-earnings (P/E) ratio is 23.93X, significantly lower than NVIDIA's 35.57X, suggesting TSMC offers better value relative to its growth potential [20] - Given NVIDIA's short-term hurdles and higher valuation, TSMC is viewed as a more attractive investment option with a favorable risk-reward balance [22][23]
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].
TSM vs. LRCX: Which Chip Supplier Stock Is the Smarter Pick?
ZACKS· 2025-06-20 14:11
Core Insights - Taiwan Semiconductor Manufacturing Company (TSMC) and Lam Research Corporation (LRCX) are pivotal players in the semiconductor industry, with TSMC focusing on chip manufacturing and LRCX on the equipment needed for production [1][6] TSMC Overview - TSMC is a leader in foundry services, producing chips for major tech companies like NVIDIA and AMD, and is advancing into 3nm and 2nm production [2][3] - In Q1 2025, TSMC reported a 35% increase in revenues and a 53% jump in profit, with AI-related revenues tripling in 2024 and expected to double again in 2025 [3][10] - TSMC plans to invest up to $42 billion in 2025, up from $29.8 billion in 2024, to maintain its competitive edge in advanced manufacturing [4] - The company faces challenges due to geopolitical tensions, rising energy prices, and potential weakness in the smartphone and PC markets [5] LRCX Overview - Lam Research is benefiting from the same AI trends, providing essential tools for next-generation semiconductor manufacturing [6][8] - In 2024, LRCX's shipments for advanced packaging exceeded $1 billion, projected to triple to over $3 billion in 2025 [8][10] - In Q3 fiscal 2025, LRCX reported revenues of $4.72 billion, a 24.5% year-over-year increase, and a non-GAAP EPS of $1.04, reflecting a 33.3% increase [9][10] Earnings Outlook and Valuation - The Zacks Consensus Estimate for TSMC's 2025 EPS implies a 31.8% year-over-year growth, while LRCX's estimate suggests a 33.8% growth [11] - LRCX trades at 23.16 times forward earnings compared to TSMC's 21.43 times, with LRCX's premium justified by its positive earnings momentum [13] Conclusion - Currently, Lam Research is viewed as the smarter investment choice due to its steady growth, strong demand, and lower exposure to geopolitical risks compared to TSMC [15][16] - Year-to-date, LRCX stock has increased by 27.7%, while TSM shares have risen by 8.1%, indicating differing investor sentiment towards the two companies [17]
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]
2 stocks to buy amid the tech market downturn
Finbold· 2025-03-14 16:58
Market Overview - Tech stocks have faced challenges, impacting the broader market after leading the rally in 2023 and 2024 [1] - The S&P 500 and Nasdaq have bounced off six-month lows, indicating volatility and hopes for market stability [1] Investment Opportunities - Market pullbacks can present opportunities for long-term growth potential [2] - Two stocks identified as attractive at current levels are Advanced Micro Devices (AMD) and Taiwan Semiconductor Manufacturing (TSMC) [2] Advanced Micro Devices (AMD) - AMD has seen a year-to-date decline of over 17%, but is considered attractive at current levels [3] - The company is gaining market share in the desktop CPU segment, with a 27% increase in 2024, and a 24% share in the laptop segment [5] - A key catalyst for growth is the upcoming PC upgrade cycle driven by Microsoft's phase-out of Windows 10 in October 2025 [6] - AMD's data center business experienced a 94% revenue increase in 2024, reaching a record $12.6 billion [6] - AMD's MI300X GPUs are gaining traction with major clients like Meta and Microsoft, with plans to sample next-generation MI350 GPUs this quarter [7] Taiwan Semiconductor Manufacturing (TSMC) - TSMC holds 64% of the global semiconductor foundry market share, serving major clients like Nvidia, Apple, and AMD [8] - The company is positioned as a critical player in the AI revolution, benefiting from tech giants' investments in AI infrastructure [9] - TSMC's stock has faced a 12% decline year-to-date, currently trading at $173.42 [9] - The company is operating at full capacity with its advanced 3nm and 5nm process nodes and is preparing for 2nm chip production later this year [10] - Analysts project revenue from TSMC's advanced process nodes to grow fourfold between 2025 and 2026, reinforcing its market leadership [10] - Price targets from Bernstein and Bank of America for TSMC are set at $251 and $265, indicating over 50% upside potential from current levels [11]