Semiconductor manufacturing giant (chip) Taiwan manufacturing semiconductors (Nyse: tsm) He recently joined Elite Trillion-Dollaar Club, becoming one of only 10 companies with a market value of more than $ 1 trillion (as of July 8).
The company, also known as TSMC, has seen a lot of growth in recent years, and its momentum is still strong. In fact, it’s one of my country Favorite stocks nowAnd I plan to hold it for a long time. Here are 10 reasons.
Photo source: Getty Images.
When it comes to The manufacture of semi -conductorsThere is TSMC, and there is anyone else. TSMC owns about 70 % of the market share of the semiconductor Mescpe market, which is more than close competitors.
There is no clear way for any competitor to approach the market share in TSMC at any time in the foreseeable future.
TSMC does not sell products directly to consumers, but their chips are found in many electronics they use daily. Includes TSMC customers apple (Smartphones, tablets, etc.), Nafidia (GPU), Timing (Self -driving technology), AMD (CPU), and dozens of other heavy weights.
In the first quarter (Q1), TSMC revenues amounted to $ 25.5 billion, an increase of 35 % on an annual basis (YOY). His net income increased by 60 % on an annual basis (in local currency), as it has continued to impress her financially impressive financial performance over the past five years.
TSMC customers usually sign long -term contracts, which helps to maintain their predictive revenues as well.
TSMC makes most of the high -energy chips essential for Amnesty International’s ecosystems. Smartphones are used to be the largest TSMC business sector, but the new demand for artificial intelligence has been around the scene. The administration estimates that the growth of revenue from artificial intelligence speeds will have an annual CAGR growth rate in the mid -40 % range until 2029.
The development of a semiconductor manufacturing factory is far from the plain, which is why some of the most richer and technical companies have not adopted yet and continue to rely on TSMC.
It takes a lot of invested capital, complex technology, and years of process improvements to reach a point where it works efficiently. This helps TSMC to keep its competitors at a distance.
One of the concerns in TSMC was the geopolitical tension between Taiwan and China. In light of this danger, the company began to expand its operations outside Taiwan.
TSMC currently has, or will soon have manufacturing factories in Taiwan, the United States, Germany and Japan.
I will not consider TSMC profit distributions, but they offer profits that complement the growth of the last stock prices. Its profits return is about 1.17 % (as of July 8), which is less than S & P 500 middle. However, the average profit return over the past three years is higher than the S&P 500.
The modest profits can still be distributed to your total long -term revenues.
The semiconductors are classified by the manufacturing complex, measured in nanoparticles (NM) – such as 7nm, 5nm, 3NM and 2NM. The smaller the knot, the more powerful and advanced conductors.
TSMC is effective with a monopoly to manufacture and sell the most advanced semiconductors in the world. Other companies cannot correspond to the TSMC efficiency and the scale it can build.
TSMC has continued investments to develop her business, but she went up to this spending with the increasing demand for artificial intelligence chips. In 2024, TSMC total costs of more than $ 30 billion. This year, this number is expected to increase between $ 38 billion and 42 billion dollars.
TSMC noticed that the highest capitalist spending is directly related to growth opportunities, which should be music for investor ears.
When you invest in a long distance company, you want one that you have shown can stand to test time. Since 1987, TSMC has moved many economic courses, introducing new technologies, and geopolitical tensions.
During each step, she modified and put himself for long -term growth, and there is no good reason to believe that he will not continue to do so.
Before buying shares in the manufacture of semiconductor in Taiwan, consider this:
the Motley Adviser is a lie The analyst’s team has just identified what they think 10 best stocks For investors to buy now … Taiwan manufacturing has not been semi -conductors. The ten shares that made the pieces can produce monster revenues in the coming years.
Look at whenNetflixThis list was submitted on December 17, 2004 … if you invest $ 1,000 at the time of our recommendation,You will have 671,477 dollars! Or when NafidiaThis list was presented on April 15, 2005 … if you invest $ 1,000 at the time of our recommendation,You will have 1,010,880 dollars!
Now, it is worth notingStock consultantAverage overall return1,047 %-Out of crushing in the market compared to180 %For S&P 500. Don’t miss the latest 10 best list, available when joiningStock consultant.
*The stock consultant dates back from July 7, 2025
Stefon Walters It has positions in the manufacture of semiconductors from Apple and Taiwan. Motley Fool has positions in advanced, Apple, NVIDIA and Taiwan seiConductor manufacturing and Tesla. Motley deception has Disclosure.
