Can New Nanosheet Chip Nodes Cement TSM's Long-Term Tech Leadership?
Taiwan Semiconductor Manufacturing Company TSM, also known as TSMC, is reinforcing its nanosheet chip technology roadmap with N2, N2P, and A16, which are aimed at extending performance and efficiency at advanced nodes. Out of these, the A16 advanced node has been specifically designed to accommodate high-performance computing (HPC) products and AI-class workloads. These advanced nodes are expected to extend TSMC's technology leadership position and enable it to capture growth opportunities into the future.
Taiwan Semiconductor's N2 logic node is the first generation of nanosheet transistor technology and offers 10-15% speed improvement, 25-30% power improvement, and more than 15% chip density gain when compared with N3E. The logic node is on track to enter volume production in the second half of 2025. Moreover, TSMC also expects the number of new tape-outs for N2, fueled by both smartphone and HPC applications, to be higher than both 3-nanometer and 5-nanometer in their first two years.
Taiwan Semiconductor is winning important customers, such as AMD and Apple, for its new N2 advanced logic node. Apple plans to use these chips in future iPhones and Mac devices, while AMD wants to use them to make faster CPUs and GPUs to compete better in the market.
Introduced in the first quarter of 2025, N2P is an extension of the N2 family, which features improved performance and power efficiency. A16 is also a nanosheet-based technology with backside power delivery and is intended to be a logical upgrade to N2P. The A16 logic node, also introduced in the first quarter, is expected to deliver up to 15-20% power improvement and an additional 7-10% chip density gain when compared with N2P.
With fabs under construction in Taiwan and Arizona to support both N2 and A16 and volume production scheduled for N2P and A16 in the second half of 2025, Taiwan Semiconductor appears well-positioned to benefit from the next wave of AI and high-performance computing demand.
How Competitors Fare Against TSM
Two key competitors, Intel INTC and GlobalFoundries GFS, are working hard to catch up with TSMC's lead. Intel plans to launch its 2nm-based node, called Intel 18A, in the second half of 2025. Intel is focusing on new technologies like RibbonFET transistors and backside power delivery for its 18A node, similar to TSMC's A16.
Meanwhile, GlobalFoundries is not focused on 2nm chips. Instead, it is investing in specialized chips for cars, wireless devices, and the IoTs. While GlobalFoundries does not directly compete with Taiwan Semiconductor at the most advanced nodes, it still aims to take market share in fast-growing chip segments.
TSM's Price Performance, Valuation and Estimates
Shares of Taiwan Semiconductor have gained 9.7% year to date compared with the Semiconductor - Circuit Foundry industry's growth of 8.7%.
TSM YTD Price Return Performance
From a valuation standpoint, TSMC trades at a forward price-to-sales ratio of 9.08X, slightly higher than the industry's average of 9.02X.
TSM Forward 12-Month P/S Ratio
The Zacks Consensus Estimate for TSMC's 2025 and 2026 earnings implies year-over-year growth of 30.54% and 14.80%, respectively. The estimates for 2025 have been revised upward in the past 60 days, while the estimates for 2026 have witnessed a downward revision over the same time frame.
TSMC currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.5% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Intel Corporation (INTC): Free Stock Analysis Report
GlobalFoundries Inc. (GFS): Free Stock Analysis Report
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
31 minutes ago
- Globe and Mail
1 Magnificent High-Yield Stock Down 55% to Buy and Hold Forever
Headline-grabbing news events often push investors into emotional investing decisions. That's exactly what is taking place today with regard to tariffs. The investor reaction to tariffs has pushed industry-leading industrial real estate investment trust (REIT) Prologis (NYSE: PLD) down 35% from its 2022 highs and led to an attractive yield of 3.7%. You can do even better, collecting a 4.7% yield, with this well-positioned industrial REIT that is down 55%. Here's what you need to know. Why are investors downbeat on Prologis? Prologis is an industrial REIT giant, with operations across North America, South America, Europe, and Asia. It owns 5,900 buildings containing 1.3 billion square feet of space. But the key part of the story is where its buildings are located. Prologis has assets in just about every major transportation hub in the world, serving 6,500 customers looking to import and export goods. This is a huge business strength, but right now it is seen as a huge negative. That's because U.S. tariffs have upended international trade norms. That's pushed Prologis' stock price down and its yield up. This is definitely a short-term disruption, but it seems unlikely to become a permanent negative. The world is so interconnected today that the more likely outcome is that trade patterns shift and Prologis' diverse portfolio of assets is still highly valuable. Prologis is, indeed, an attractive dividend investment opportunity today. And yet there's an even more interesting story to be told with Rexford Industrial Realty (NYSE: REXR). Highly focused Rexford is deeply out of favor Like Prologis, Rexford owns industrial assets that are vital to international trade. The most important difference between the two REITs is that Rexford is focused on just one single market, Southern California. It owns 424 properties with 51 million square feet of space in them. The key here is that Southern California is the major gateway for Asian goods entering the U.S. market (and vice versa). That, of course, is the problem, given the high-profile tariff fight between the United States and China. The near-term uncertainty has led investors to abandon Rexford. But, like Prologis, it seems more likely that international trade will adjust to a new normal than stop entirely. That alone makes Rexford's lofty 4.7% dividend yield attractive, but there's more. Southern California is a supply-constrained market. That gives Rexford a strong negotiating position when signing leases. Rexford is also a skilled redeveloper, frequently buying older assets and upgrading them so that they are more modern and desirable. That also helps its ability to raise rents. To be fair, the highly concentrated nature of Rexford's business does make it riskier than more diversified Prologis. But unless you believe international trade is going to stop, Rexford should come out the other side of the current uncertainty in a strong position. The opportunity to buy Rexford Industrial is in the here and now Oftentimes the best opportunities to buy a well-run company arise when Wall Street is overly pessimistic. The key is to figure out if the worry is about something that will linger or something that is likely to be temporary. The upheaval in international trade seems like a temporary issue, given how interconnected the world is today. For more conservative investors that could make Prologis an attractive option, while more aggressive investors will probably prefer higher-yielding Rexford industrial. And if you do buy one of these high-yield industrial REITs you'll probably end up owning it for the long term. Should you invest $1,000 in Prologis right now? Before you buy stock in Prologis, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Prologis wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $655,255!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $888,780!* Now, it's worth noting Stock Advisor 's total average return is999% — a market-crushing outperformance compared to174%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 9, 2025
Globe and Mail
an hour ago
- Globe and Mail
Can Nvidia Stock Double in 5 Years?
Nvidia (NASDAQ: NVDA) has delivered extreme wealth for early investors, but it's also rewarded investors who bought shares fairly recently. Although it's been under pressure this year, it's up more than 740% over the past three years. That's far more than double. Buying Nvidia stock today would be a no-brainer for anyone who thinks it can replicate that success. But it wouldn't even have to achieve such a rare feat to be valuable to investors. If it doubles five years from now, it would likely beat the market and be a very valuable addition to almost any portfolio. Let's see if that might be in the cards. Enviable performance Nvidia has had an unbelievable run over the past few years since generative artificial intelligence (AI) became the hottest thing since sliced bread. Tech companies are racing to develop the most competitive AI platform or integrate some aspect of AI into their user interfaces. Companies now offer AI-generated content, images, summaries, and more, and they're using agentic AI to get more stuff done with less human intervention. What's common to all of these applications is that they need powerful chips to make the magic happen. There are two basic parts of bringing generative AI to life. One is training, or the input stage, where large language models (LLM) scan tons of data to build their knowledge base. The other is inference, where the LLMs "infer" what's being asked or prompted to deliver the required output. Nvidia also services other industries with its powerful platform, including gaming, which is what drove higher sales before generative AI heated up. Nvidia has been unstoppable. In the fiscal 2026 first quarter (ended April 27), sales increased 69% over last year. Earnings per share (EPS) were $0.81, including a charge it took for shipments it couldn't send to China because of U.S. policy. Even with the $0.15-per-share impact, Nvidia's EPS were well above last year's figure. Unusual opportunities As LLMs become more stable and effective, they're now going past inference to reasoning, which is a more developed stage of inference that takes a bit longer, but produces better results. Instead of popping out instant answers, LLMs that use reasoning might take a few seconds to "think" and then respond. To keep up with the ever-increasing demands for powerhouse chips, Nvidia continues to develop more powerful technology. The Blackwell model has given way to Blackwell Ultra, and Nvidia is planning on launching new technology, called Rubin, in 2026. "AI inference token generation has surged tenfold in just one year," CEO Jensen Huang said, "and as AI agents become mainstream, the demand for AI computing will accelerate." Clients use these chips to power huge data centers where all of this is taking place, and big AI-using companies like Amazon, Microsoft, and Meta Platforms are building data centers. Nvidia's data center revenue outpaced total revenue in the first quarter, up 73% from last year. Nvidia has the best and most powerful chips, and it has the lead in this market by a wide margin. Estimates put it somewhere between 70% and 95% of the AI chip market, and as the opportunity grows, it's easy to see how much it could benefit Nvidia. Priced to buy Despite its lofty ambitions and premier performance, Nvidia stock isn't very expensive. At the current price, it trades at only 25 of next year's earnings estimates. That gives the stock extra room to increase without becoming unreasonably expensive, making it easier to imagine scenarios where it can double your money. From a sales perspective, it's fairly expensive, trading at 23 times trailing-12-month sales. That's a premium valuation for the growth that it has reported. To imagine doubling your money, you'd have to keep that ratio constant, because it isn't likely to rise. Keeping it constant, Nvidia would have to report a compound annual growth rate of 15% to double over five years. That seems very doable, considering its current performance and future opportunities. And even if it can't sustain such a high price-to-sales ratio, it can probably achieve higher than 15% growth over the next five years, which means it can double even at a lower ratio. All this means Nvidia stock is likely to double over the next five years -- and it's very possible that it could do it even sooner. Should you invest $1,000 in Nvidia right now? Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $655,255!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $888,780!* Now, it's worth noting Stock Advisor 's total average return is999% — a market-crushing outperformance compared to174%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 9, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Globe and Mail
2 hours ago
- Globe and Mail
2 Artificial Intelligence (AI) Stocks That Could Dominate the Rest of 2025
As long-term investors, it's most important to focus on where a company will be in 10 years and invest accordingly. But it's also beneficial to find growth stocks benefiting from catalysts that could send their shares higher in the near term. After falling earlier this year, Advanced Micro Devices (NASDAQ: AMD) and Amazon (NASDAQ: AMZN) are starting to see their share prices rise. AMD is a leader in supplying artificial intelligence (AI) chips to data centers, while Amazon is benefiting enormously from its increasing use of robotics in its fulfillment centers. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Here's what's driving these stocks higher and why they have room to run. 1. Advanced Micro Devices Shares of AMD have soared 61% since hitting a 52-week low of $76.48 in April. The company reported its third consecutive quarter of accelerating revenue growth as it prepares to launch new versions of its MI300 series of graphics processing units (GPUs) for data centers. AMD is building momentum. It recently announced an agreement with Saudi Arabia's new AI enterprise HUMAIN to build cost-efficient computing systems using AMD chips to power advanced AI workloads for enterprises, start-ups, and governments. This news comes as AMD is set to launch its MI350 GPU. Its first data center GPU debuted in 2023: the MI300 chip, which raked in $5 billion of revenue last year. The MI350 promises 35 times more throughput and performance than the MI300x, and management said on the first-quarter earnings call that customer interest is "very strong." Oracle is already in line to deploy a large-scale cluster powered by MI355x accelerators for AI workloads. AMD reported a 36% year-over-year increase in revenue in the first quarter, accelerating from a 24% increase in the fourth quarter of 2024. The momentum is catching investors' attention heading into the company's upcoming Advancing AI event, where analysts are expecting it to announce new design wins and potentially new customers for its GPUs. During the first-quarter earnings call, management noted positive customer feedback and plans for broader deployments for its MI400 chip, which is being launched in 2026. Even with the risk that chip export controls might pressure revenue, CEO Lisa Su doesn't see China chip restrictions changing AMD's long-term addressable market, which is estimated at $500 billion. AMD is on track to finish 2025 on a high note. The consensus analyst estimate has earnings per share growing 20% in 2025 before surging 44% in 2026, according to Yahoo! Finance. Given this expectation, the stock's forward price-to-earnings multiple of 31 could support more gains in the near term. 2. Amazon Shares of Amazon have rebounded 42% from their 52-week low of $151.76. With analyst estimates calling for record earnings in 2025 and 2026, the stock could be ready to hit new highs in the second half of the year. The company reported a 62% year-over-year increase in earnings in the first quarter. Its growing use of robotics across its fulfillment network is starting to gain attention on Wall Street that could send its stock higher in the second half of 2025. There's no retailer more invested in robotics than Amazon. Since it acquired robotics company Kiva Systems in 2012, Amazon has continued to lean into this technology to improve delivery speeds and efficiency. It has the largest fleet of industrial robots, with over 750,000 across its fulfillment network. This technology is getting very sophisticated, and it uses different types of robots for various tasks. For example, its Vulcan robot knows how much force to apply to an object to avoid damaging it. Amazon says it has several initiatives underway to improve its cost structure. It is reportedly testing the use of humanoid robots for carrying packages from the delivery van to a customer's door. This could be very beneficial to margins in the long run, since the last mile typically accounts for over half of total shipping costs. With AI and robotics getting more advanced every year, now's the time to buy Amazon stock. Robots are only going to get more capable in the coming years, which will increase the number of tasks they can handle in the company's fulfillment centers. This spells massive productivity gains and margin improvement that is not reflected in the stock's current valuation. The shares are trading at 35 times 2025 earnings estimates, which looks very reasonable considering the robust earnings growth over the past year and opportunities for higher margins over the long term. As Wall Street continues to pay attention to Amazon's opportunity in robotics, the stock could climb higher. Should you invest $1,000 in Advanced Micro Devices right now? Before you buy stock in Advanced Micro Devices, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Advanced Micro Devices wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $655,255!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $888,780!* Now, it's worth noting Stock Advisor 's total average return is999% — a market-crushing outperformance compared to174%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 9, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. John Ballard has positions in Advanced Micro Devices and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, and Nvidia. The Motley Fool has a disclosure policy.
