In recent investment markets, TSMC has been the talk of wall street. They have helped Apple produce their new M2 Chip, Nvidia produce their Blackwell AI chip, and AMD produce their AMD Ryzen 9 9950X. Each of these chips has found a significant place in society — the M2 Chip powering all of Apple’s new Macbooks, Nvidia’s new Blackwell AI chip foraging quantum computing, or Intel’s new Lunar Lake chip powering millions, if not billions of PCs. Is this company capable of handling this much weight from global powerhouses?
Founded in 1987, Taiwan Semiconductors’ sole goal was to manufacture the chips, not design them. In 2023, the semiconductor industry was valued at 611.35 billion dollars and had a projected CAGR of 7.64%, allowing the industry to grow to 1.13 trillion dollars. This is because they received demand from companies like Apple and Nvidia. Taiwan Semiconductors’ 2024 Q3 revenue was $759 billion, representing a 38.95% increase from 2023 Q3’s revenue figures. Additionally, TSM’s gross profit margin in Q3 of 2024 of 54.45% is an 8.16% difference from the sector average of 50.34%. They have been skyrocketing as of recent, and I expect this to continue.
Taking all of these factors into account, I am fully in on the Taiwan Semiconductor hype. TSM has a multitude of customers and can and is growing with the huge AI boom, allowing it to stay at the top. TSM has a large customer base, but I only see its base growing with the importance of AI. I believe that if TSM expands and develops a multitude of overseas fabricator locations, it can truly rule the semiconductor manufacturing business with its ever growing clients, allowing Taiwan Semiconductors to be a buy candidate. One thing to be careful with is the tensions brewing between Taiwan and China.
