Latest news with #TaiwanSemiconductorManufacturingCo.Ltd
UPI
2 days ago
- Business
- UPI
Taiwan's chip dominance becomes global security, economic flashpoint
President Donald Trump listens at a White House news conference March 3 as Commerce Secretary Howard Lutnick comments on Trump's announcement of a $100 billion U.S. investment by Taiwan Semiconductor Manufacturing Co. Ltd. File Photo by Samuel Corum/UPI | License Photo WASHINGTON, June 12 (UPI) -- Taiwan may be an island of just over 23 million people, but what happens there could ripple across the global economy. The small democratic nation produces the vast majority of the world's most advanced semiconductors -- chips that are used in everything from smartphones and electric cars to defense systems and spacecraft. Taiwan Semiconductor Manufacturing Co. Ltd. "produces roughly 90% of the most sophisticated computer chips, and the loss of that would be devastating," said Steven David, a professor of political science at Johns Hopkins University in Baltimore. "We can't get around without it." For Taiwan, this manufacturing dominance isn't just economic -- it's strategic. Analysts call it the island's "silicon shield." The world relies heavily on Taiwan's chips, which deters China from launching a military attack and pushes allies like the United States to come to Taiwan's defense. The geopolitical stakes around Taiwan's semiconductor dominance have soared as China escalates military pressure, through increased fighter jet incursions, large-scale naval drills and explicit threats of reunification. U.S. lawmakers from both parties have increasingly voiced concern that a Chinese invasion could upend global chip supply chains and empower Beijing with outsized economic leverage. "It [would be] monumentally stupid to try to keep something as fragile as chips production going during the time of war," said Kitsch Liao, associate director of the Atlantic Council's Global China Hub. "One stray shell could destroy that plant and you're done." The United States has taken steps to address this vulnerability. In 2022, former President Joe Biden signed the CHIPS and Science Act, allocating $280 billion to support domestic semiconductor manufacturing and research, including subsidies for Taiwan Semiconductor to build a plant in Phoenix. In March, President Donald Trump announced a new $100 billion deal with the company to dramatically expand its manufacturing presence in the United States. "America is building plants with Taiwanese investment and cooperation in Arizona and elsewhere, but it would still be devastating," David said, referring to the potential impact of a Chinese attack on chip production. Taiwan's government has had to carefully balance cooperation with the United States against growing fears at home that shifting too much chip production abroad could weaken its security. Taiwan's two main political parties, the Kuomintang, or KMT, and the Democratic Progressive Party, or DPP, have debated the best approach to cross-strait relations. While the KMT supports closer ties with China, the DPP, which currently holds the presidency under Lai Ching-te, has leaned toward reinforcing Taiwan's democratic independence and diversifying trade, actions that could increase already mounting pressure from China. "If China does successfully invade Taiwan and takes over the TSMC plant, it won't be able to use the plant the way Taiwan does," David said. "But it would deny its use to others, and that would be devastating to the world economy. Several percentages of world GDP would drop as a result." Analysts worry that even the threat of invasion could destabilize markets. Blockades or gray zone tactics by Beijing, short of all-out war, could still limit Taiwan Semiconductors' ability to export. "Any erosion in Taiwan's ability to trade with the rest of the world would have a significant impact on the global economy," said Jack Burnham, a research analyst at the Washington-based Foundation for Defense of Democracies. "It would disrupt the flow of semiconductors to a variety of different industries that are incredibly valuable to the United States, its allies and partners, and the global community." Taiwan has long been one of the most contentious issues in United States-China relations. After the Chinese Civil War, the Nationalist government fled to Taiwan in 1949, and the Chinese Communist Party established the People's Republic of China on the mainland. Since then, Beijing has claimed Taiwan as an inalienable part of its territory. In 1979, the United States. ended formal diplomatic recognition of Taipei in favor of Beijing, but passed the Taiwan Relations Act, which commits the United States to help Taiwan maintain a "sufficient self-defense capability." The United States, though, has remained deliberately vague about whether it would come to Taiwan's defense in the event of a Chinese invasion -- a policy known as strategic ambiguity. But as threats of an invasion increased, this stance continued to be tested. In a speech in Singapore last month, Defense Secretary Pete Hegseth vowed that "devastating consequences" could result should China seek to "conquer" Taiwan, warning that an invasion could be "imminent." Beyond semiconductor and chips manufacturing, Taiwan remains a core interest in the Indo-Pacific region. The island sits at the heart of the "first island chain," a line of U.S.-aligned territories stretching from Japan to the Philippines. If China were to take over Taiwan, experts warned it could use the island as a launchpad to project power deep into the Pacific, posing a direct challenge to U.S. interests. "Should China be successful [in a reunification scenario], it would have a significant impact on the lives of everyday Americans -- both in their wallets and in the political situation they find themselves in," Burnham said. "What's at stake when it comes to Taiwan is the free flow of trade, a significant part of the American economy, and the health and stability of the United States' key allies and partners in the region."
Yahoo
01-05-2025
- Business
- Yahoo
Is Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) the Best Growth Stock to Buy for the Next 3 Years?
We recently published a list of the 15 Best Growth Stocks to Buy for the Next 3 Years. In this article, we are going to take a look at where Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) stands against other growth stocks to buy for the next 3 years. On April 29, Dan Ives of Wedbush Securities joined 'Power Lunch' on CNBC to discuss his outlook for the tech sector and expressed that tariffs aren't stopping the AI revolution. According to Ives, the critical question for the sector was whether spending, particularly CapEx, was being maintained. He expressed confidence that CapEx was holding up and predicted that the forthcoming results from big tech companies would serve more as a confidence booster for the market, rather than fueling the existing fears. As some investors are of the idea that concerns about a potential soft patch in the economy remain, there's a preference for safer investments in insurance and other stable sectors, rather than big tech. However, Ives acknowledged that while uncertainty had been prevalent in recent weeks, his own survey work and field research indicate that AI-related spending stays strong. He noted that, while there were areas of the cloud sector where spending was accelerating, the overall uncertainty would likely result in broad guidance ranges from companies. Michael Darda, the Managing Director, Chief Economist, and Macrostrategist at ROTH, also believes that AI would generate solid returns in the future. Ives agreed with Darda's assessment and stated that enterprises were seeing similar advancements and could not afford to leave their AI projects behind without the risk of consequently falling behind. He also pointed out that for companies like those in the MAG7, the AI revolution is a central theme, which is why challenges brought forward by tariffs would not impact the AI revolution as much. Darda changed his outlook from bearish to bullish on tech and AI recently due to his personal experience with AI tools, which he felt had improved over the past year. Dan Ives reiterated that, despite the uncertainty created by tariffs, the demand for software remained a safety blanket, and spending by hyperscale companies is expected to continue. Our Methodology We sifted through financial media reports to compile a list of the top growth stocks to buy for the next 3 years. We then selected 15 stocks with a 3-year revenue compound annual growth rate of over 20%. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024, which was sourced from Insider Monkey's database. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). A close-up of a complex network of integrated circuits used in logic semiconductors. 3-Year Revenue CAGR: 22.32% Number of Hedge Fund Holders: 186 Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) manufactures, packages, tests, and sells ICs and other semiconductor devices. It offers a range of wafer fabrication processes, such as processes to manufacture complementary metal-oxide-semiconductor logic, mixed-signal, radio frequency, embedded memory, and others. In FQ1 2025, HPC made 59% of TSMC's total revenue, which totaled $25.78 billion and improved by 41.40% year-over-year. This HPC revenue itself improved by 7% sequentially, which was driven by the demand for AI-related applications. To support this growth in AI and HPC, TSMC is making investments in advanced packaging technologies, particularly CoWoS. TSMC expects to 2x its CoWoS capacity by 2025. Notably, the shipments of 3nm made up for 22% of total wafer revenue, and 5nm for 36%. On April 21, Barclays analyst Simon Coles lowered the price target on the TSMC to $215 from $255 while keeping an Overweight rating. According to the analysts, the company's shares are already pricing in a slowdown. From 2024 to 2029, Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) expects revenue CAGR to approach 20%. The company's results and guidance showcased strong AI chip demand, which is why Sands Capital Technology Innovators Fund stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q4 2024 investor letter: 'Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) third-quarter 2024 results and guidance showcased strong continued demand for artificial intelligence (AI) chips. Revenue increased by 29 percent, and earnings saw a 54 percent rise year-over-year. Gross margins were at their highest since 2022, bolstered by price hikes and record utilization at both the 3 nanometer (nm) and 5nm nodes. TSMC's full-year revenue outlook was revised upward from 25 percent to 30 percent growth. The company also anticipates higher capital expenditure in 2025, a leading indicator for revenue. Overall, TSM ranks 2nd on our list of the best growth stocks to buy for the next 3 years. While we acknowledge the growth potential of TSM, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than TSM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
25-04-2025
- Business
- Yahoo
Is Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) the Most Promising Stock According to Analysts?
We recently published a list of the 11 Most Promising Stocks According to Analysts. In this article, we are going to take a look at where Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) stands against other promising stocks. On April 23, Stephen Parker, JPMorgan Private Bank co-head of global investment strategy, joined 'Squawk Box' on CNBC to express that investors should have a normal level of risk in their portfolios right now. Parker explained that while he is fully in support of remaining invested in the market, he does recommend clients to stay focused on sectors that may be more resilient in a downturn to help protect against losses while staying long. His baseline guidance is for clients to maintain a normal level of risk in their portfolios. Those holding too much cash should get invested, and those overexposed to US markets and the dollar should consider adding non-US exposure. He advised that this is a period where investors must be comfortable with discomfort, as policy uncertainty broadens the range of possible outcomes. Parker acknowledged that while downside risks are top of mind for many investors, there is also upside potential, especially if there are positive policy surprises, such as clarity on tariffs, which could drive markets back to their highs sooner than expected. His outlook for the S&P 500 index is a wide range, with the high end being flat for the year and a possible range of 5,700-6,200. This reflects heightened policy uncertainty and difficulty in pinpointing a single target. Parker pointed out that even if it takes two years for markets to return to all-time highs, an 8% annual return would still be compelling for equities. Reflecting on the start of the year, he noted that market multiples were considered rich following 2 consecutive years of 20%+ gains. There was optimism around deregulation and changes to corporate taxes, but few expected the S&P 500 to remain flat for 2 years from a level of 6,200. Parker further explained that even without pro-business policy changes, the market may have faced challenges after such strong recent gains. The pullback in high-performing segments of the US market has brought valuations closer to what he considers normal levels, which also sets the stage for potential upside. Our Methodology We sifted through the Finviz stock screener to compile a list of the top stocks that had high analysts' upside potential (at least 35%). The stocks are ranked in ascending order of their upside potential. We have also added the hedge fund sentiment for each stock, as of Q4 2024, which was sourced from Insider Monkey's database. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). A close-up of a complex network of integrated circuits used in logic semiconductors. Number of Hedge Fund Holders: 186 Average Upside Potential as of April 23: 41.23% Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) manufactures, packages, tests, and sells integrated circuits and other semiconductor devices. It provides various wafer fabrication processes, such as processes to manufacture complementary metal-oxide-semiconductor logic, mixed-signal, radio frequency, embedded memory, bipolar CMOS mixed-signal, and others. In FQ1 2025, HPC made 59% of the company's total revenue, which totaled $25.78 billion and improved by 41.40% year-over-year. This HPC revenue itself improved by 7% sequentially due to the sustained demand for AI-related applications, which the CEO of the company anticipates to double in revenue in 2025. This category of AI accelerators includes AI GPUs, AI ASICs, and HBM controllers used for both AI training and inference in data centers. To support this explosive growth in AI and HPC, TSMC is making substantial investments in advanced packaging technologies, particularly CoWoS (Chip-on-Wafer-on-Substrate). TSMC is working to double its CoWoS capacity in 2025. Despite a projection of a mid-40% revenue CAGR from AI accelerators for the five years starting from 2024, Barclays analyst Simon Coles lowered the price target on the stock to $215 from $255 while maintaining an Overweight rating on April 21. The company's results and guidance showcased strong AI chip demand, which is why Sands Capital Technology Innovators Fund stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q4 2024 investor letter: 'Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) third-quarter 2024 results and guidance showcased strong continued demand for artificial intelligence (AI) chips. Revenue increased by 29 percent, and earnings saw a 54 percent rise year-over-year. Gross margins were at their highest since 2022, bolstered by price hikes and record utilization at both the 3 nanometer (nm) and 5nm nodes. TSMC's full-year revenue outlook was revised upward from 25 percent to 30 percent growth. The company also anticipates higher capital expenditure in 2025, a leading indicator for revenue. Overall, TSM ranks 5th on our list of the most promising stocks according to analysts. While we acknowledge the growth potential of TSM, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than TSM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
16-04-2025
- Business
- Yahoo
Is Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) a Reddit Stock with High Potential?
We recently published a list of the . In this article, we are going to take a look at where Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) stands against other Reddit stocks with high potential. On April 15, Monica Guerra, Morgan Stanley Wealth Management Head of US Policy, joined 'Closing Bell Overtime' on CNBC to discuss how investors should avoid knee-jerk reactions when it comes to volatility. Monica Guerra pointed out the significance of focusing on President Trump's statements, as they contribute to market volatility despite their mixed and unclear nature. She acknowledged that deciphering his comments is challenging because they lack clarity but staying attentive to both presidential statements and congressional actions is still crucial. She stressed that policy certainty might emerge once Congress finalizes the budget, which is expected around August this year. She also emphasized that while the day started positively with markets up by 0.79%, the situation otherwise remains uncertain. She reminded clients that the 90-day reprieve on tariffs is not the end of the story and the ongoing studies on semiconductors could lead to additional pressures related to tariffs and market volatility. Guerra noted that tariff revenues are being considered as funding sources for tax cuts and this interplay between tariffs and taxes could influence market volatility. On discussing future developments in tariff policy, she mentioned that more than 70 countries have approached President Trump in attempts to renegotiate the universal 10% tariff and reciprocal tariffs. She cautioned that even if reciprocal tariffs are eliminated and only the universal tariff remains, additional increases could be highly inflationary. China's effective tariff rate is already at 145% and adding reciprocal tariffs could push inflationary pressures further. Guerra advised clients against reacting impulsively to such news and encouraged them to focus on long-term investment goals. We sifted through Reddit threads to make a list of the top stocks with the highest analysts' upside potential (at least 30%) as of April 15. The stocks are ranked in ascending order of their upside potential. We have also added the hedge fund sentiment for each stock, as of Q4 2024. The hedge fund data was sourced from Insider Monkey's database which tracks the moves of over 1000 elite money managers. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). A close-up of a complex network of integrated circuits used in logic semiconductors. Number of Hedge Fund Holders: 186 Average Upside Potential as of April 15: 56.25% Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) manufactures, packages, tests, and sells integrated circuits and other semiconductor devices. It provides various wafer fabrication processes, such as processes to manufacture complementary metal-oxide-semiconductor (CMOS) logic, mixed-signal, radio frequency, embedded memory, bipolar CMOS mixed-signal, and others. The company's dominance in the market is evident as it increased its market share from 63% to 67% in Q4 2024 while maintaining over 90% market share in advanced chip manufacturing. TSMC's 3nm and 2nm process yields outperform its closest competitor, which is Samsung, by 20% and 40%, respectively. These advanced process technologies are needed to develop high-performance AI chips. In 2024, the company's HPC segment made up 51% of its total revenue. The segment's revenue rose by 58% year-over-year which was driven by AI-related applications. The company's AI accelerators, which contributed a mid-teens percentage to its total revenue, include AI GPUs, AI ASICs, and HBM controllers. Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM) forecasts that revenue growth from AI accelerators will reach a mid-40% CAGR for five years starting from 2024. The company's results and guidance showcased strong AI chip demand, which is why Sands Capital Technology Innovators Fund stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q4 2024 investor letter: 'Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) third-quarter 2024 results and guidance showcased strong continued demand for artificial intelligence (AI) chips. Revenue increased by 29 percent, and earnings saw a 54 percent rise year-over-year. Gross margins were at their highest since 2022, bolstered by price hikes and record utilization at both the 3 nanometer (nm) and 5nm nodes. TSMC's full-year revenue outlook was revised upward from 25 percent to 30 percent growth. The company also anticipates higher capital expenditure in 2025, a leading indicator for revenue. Overall, TSM ranks 3rd on our list of the 12 Reddit stocks with high potential. While we acknowledge the growth potential of TSM, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than TSM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey.
