Latest news with #chipmanufacturing
Yahoo
2 days ago
- Business
- Yahoo
TSMC Stock Maintains High-Conviction AI Play Status With $220 Price Target
Taiwan Semiconductor Manufacturing Company (TSM), or TSMC for short, the world's numero uno pure-play semiconductor foundry, has surged nearly 20% over the past month. Despite this impressive rally, my outlook remains bullish. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter The company is well-positioned to benefit from powerful tailwinds, including relentless AI-driven demand, a dominant—nearly monopolistic—position in advanced chip manufacturing, ongoing geographic diversification, and a steady cadence of technological breakthroughs. TSMC continues to be the principal manufacturer and primary supplier of chips for leading AI powerhouses, including Nvidia (NVDA), Advanced Micro Devices (AMD), Apple (AAPL), and Qualcomm (QCOM). Notably, TSM is also the producer of Nvidia's cutting-edge Blackwell chip series, which has recently gained immense popularity. TSMC's 3nm process currently represents the most advanced semiconductor technology in the industry, delivering superior power efficiency and performance. Looking ahead, anticipation is building around the company's upcoming 2nm and 1.6nm nodes, scheduled for launch in late 2025 and 2026, respectively. The 2nm technology, referred to as N2, remains on track for volume production in the second half of 2025. This next-generation process is expected to deliver a 10–15% improvement in processing speed at the same power consumption, or a 20–30% reduction in power usage at equivalent performance. Following that, the 1.6nm process is projected to further improve power efficiency by an additional 15–20% over the 2nm node. These advancements are especially timely, as data centers grapple with rising energy costs. The shift to more power-efficient chips is becoming not only a technological imperative but also an economic necessity. This positions TSMC as a key enabler in the ongoing global semiconductor upgrade cycle. Reflecting this momentum, TSMC has outlined strong long-term growth expectations. The company projects its AI-related chip revenue to grow at a compound annual growth rate (CAGR) of 45% over the next five years, while overall revenue is forecast to grow at a 20% CAGR during the same period. These figures underscore the company's pivotal role in powering the future of computing. Such growth potential hasn't gone unnoticed. Famous investor Cathie Wood's Ark funds recently purchased 241,047 shares of Taiwan Semiconductor, worth $46.3 million, signaling firm institutional conviction. TSM commands an overwhelming 64.9% global market share in the foundry segment, dwarfing its closest competitors— Samsung Electronics (SMSN) and Intel (INTC), according to Statista. Its unparalleled scale, deep client relationships, and technological edge create formidable barriers to entry. This dominant position grants TSM significant pricing power. Clients, many of whom have relied on TSM for decades, are unlikely to switch suppliers given the risk of falling behind in the rapidly evolving AI race. One of the major risk factors associated with TSM is its geographical location in Taiwan, which poses the risk of a takeover by China. However, TSM is prioritizing geographic diversification as a core strategic initiative, proactively addressing these risks by diversifying its global manufacturing footprint. In addition to its $65 billion investment in U.S.-based fabs, TSM has committed a further $100 billion to expand capacity globally. Its Arizona facility is reportedly operating at full capacity through 2027, highlighting robust demand. This geographic diversification not only reduces exposure to potential tariffs but also strengthens TSM's resilience to geopolitical volatility. Beyond the U.S., TSM is also establishing a new chip design center in Munich, Germany, as well as a manufacturing plant in Dresden, Germany, and new fabs in Japan. Taiwan Semiconductor's strategic investments beyond its home base reflect prudent risk management and reinforce its strategic shift toward a more balanced global presence. TSM is set to report its Q2 2025 earnings on July 17. The company is projected to report earnings per share (EPS) of $2.30, representing a 57.5% year-over-year increase. Additionally, Q2 revenues are projected to increase by 13% year-over-year, ranging between $28.4 billion and $29.2 billion, driven by high demand for its advanced 3-nanometer (nm) and 5-nm processes. On May 9, TSM unveiled impressive revenue figures for April 2025, marking the highest ever figure in any single month in the company's history. April net revenues galloped 48.1% year-over-year to 349.6 billion New Taiwan dollars (approximately $11.6 billion). It's worth noting that TSM anticipates 24% to 26% sales growth for FY2025, driven by strong demand for its latest nanochips amid the AI surge. Importantly, TSM trades at an attractive valuation compared to its peers. In terms of its valuation, TSM looks cheap. Currently, it's trading at an attractive forward P/E ratio of 21x, compared to much higher multiples of its peer group. Semiconductor company Advanced Micro Devices is trading at a higher forward P/E multiple (28x), while the AI prodigy Nvidia is trading at a forward P/E of 32x. On Wall Street, TSM stock carries a Strong Buy consensus rating based on seven Buy, one Hold, and zero Sell ratings over the past three months. TSM's average stock price target of $219.43 implies approximately 11% upside potential over the next twelve months. The semiconductor industry continues to experience strong growth, driven largely by the rapid adoption of artificial intelligence technologies. TSMC, with its unmatched manufacturing capabilities, deeply embedded customer relationships, and advanced technology roadmap, is exceptionally well-positioned to capitalize on this transformative trend. The company's timely investments in next-generation nodes—specifically 2nm and 1.6nm—alongside its global manufacturing expansion, align well with rising demand fueled by a broad upgrade cycle across the tech landscape. These factors collectively make TSMC a compelling long-term investment opportunity. With a favorable valuation and strong earnings momentum, the current environment presents an attractive entry point for investors looking to gain exposure to the accelerating AI megatrend. 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Entrepreneur
4 days ago
- Business
- Entrepreneur
India Set to Launch Its First Homegrown Semiconductor Chip This Year: Ashwini Vaishnaw
The minister emphasized the strategic choice to target the 28–90 nm segment—chips commonly used in automotive, telecom, and industrial applications—which represents 60 per cent of the global market volume You're reading Entrepreneur India, an international franchise of Entrepreneur Media. Union Minister for Electronics and IT Ashwini Vaishnaw announced that the country's first indigenous semiconductor chip, built within the 28 to 90 nanometre range, will be launched before the end of the year. The declaration was made during the Confederation of Indian Industry's (CII) Annual Business Summit. "Today, six fabrication units are under construction. The rollout of the first Made in India chip is expected this year," Vaishnaw said. "We initiated this journey in 2022, and the progress has been steady." The minister emphasized the strategic choice to target the 28–90 nm segment—chips commonly used in automotive, telecom, and industrial applications—which represents 60 per cent of the global market volume. "There are many people who criticised us for vying [for] semiconductor manufacturing. We targeted a particular segment, which has 60 per cent of market volume, using a targeted approach," he said. Vaishnaw also pushed for a more balanced economic model that gives equal weight to manufacturing and services. "A lot of big economists want us to focus on services. Manufacturing and services are both equally important for next-level growth," he noted. "We should increase our work wherever we get opportunity. We should have our own IP, product, design and standards." Turning to the transformative impact of Artificial Intelligence, Vaishnaw compared its current momentum to the revolutionary effect of the internet. "What internet did for the world, similar phenomenon would be brought forth from AI. We should be prepared for that change regardless of industry and sector," he said. He underscored the importance of culturally rooted AI systems, adding, "We need to have AI models that are trained on Indian culture, nuances, languages, social norms. One of the first such models is being developed by Sarvam." Beyond technology, Vaishnaw, who also oversees the Railways portfolio, pointed to major achievements in freight logistics. "We have become the second largest cargo-carrying railway in the world. 1,612 million tonnes of cargo [were] carried, overtaking the US and Russia," he revealed. Passenger services are also advancing steadily. "Our passenger carrying capacity has increased substantially. We have reached a level where dreams are being fulfilled and goals are being achieved," he said, calling on more industries to partner with the railways. Highlighting the role of innovation, he concluded, "Our experiment of bringing startups into [the] railway sector was very successful. We are now bringing a new policy where we can test a new innovative idea and then scale it up based on the results."
GSM Arena
6 days ago
- Business
- GSM Arena
A merger between Samsung's LSI and Foundry divisions is getting increasingly likely
Samsung's chip-manufacturing business isn't doing great, and poor yield is partially to blame. Even the Galaxy S25 series switched entirely to Snapdragon this year. Though the Exynos will return to the S26 series if the rumors are correct. The issues with Samsung's LSI (the chip design arm) run so deep that reports suggest a merger between Samsung LSI and another division, most likely Foundry. The initial rumors suggest that Samsung is planning to merge Samsung MX (Mobile Experience) and LSI, but the latest development is pointing to a Foundry-LSI merger instead. A South Korean news outlet says that during an internal meeting at the company, three possible scenarios were discussed - merge LSI into MX, merge LSI into Foundry or massively restructure LSI. According to people familiar with the matter, a merger with Foundry was favored, but no final decision has been made. It's interesting to note that LSI and Foundry were once under the Samsung DS (Device Solutions) division, but they were separated back in 2017 to reduce the chances of conflict of interest with other Samsung Foundry clients like Nvidia and Qualcomm. Source
Yahoo
25-05-2025
- Business
- Yahoo
4 Reasons to Buy Taiwan Semiconductor Manufacturing Stock Like There's No Tomorrow
Taiwan Semiconductor is building factories in key markets around the globe. Management is preparing to meet huge demand over the next five years. The market hasn't given the chipmaker the premium valuation it deserves. 10 stocks we like better than Taiwan Semiconductor Manufacturing › Taiwan Semiconductor Manufacturing (NYSE: TSM) is currently one of my top stock picks. Although there are concerns about Taiwan's geographical location, the company is taking steps to ease them. While it's doing that, there's a massive demand for chips, and TSMC is rolling out new technology later this year and next to meet that need. If you weren't aware already, TSMC makes the actual chips for most all the biggest semiconductor companies. Because of that neutral stance in the chip world, I think it's one of the best ways to play nearly every technological trend. When you trace almost every technology back to its chip roots, many roads lead to TSMC, which is why I'm so bullish. I've got four reasons investors should buy Taiwan Semiconductor's stock like there's no tomorrow, although there are likely many more out there. Two risks are typically discussed when discussing TSMC's stock: tariffs and China. There's a fear that China could take over Taiwan, but this move would send markets around the world into disarray. Tariffs are another concern, but currently there aren't any on semiconductors. While these two fears may not be an issue now, that doesn't mean they won't be in the future. To get ahead of that, Taiwan Semiconductor is diversifying its global footprint. It already has a $65 billion facility in the U.S., but it's deploying an additional $100 billion to build even more production capacity. TSMC is also building facilities in Germany and Japan, which helps decrease the risk of generating nearly all of its revenue from Taiwan. By increasing U.S. production, it's also decreasing its chances of being affected by tariffs. The demand for U.S.-produced chips is already high, and the Arizona facility has already sold out production capacity through 2027. Taiwan Semiconductor is making smart moves by investing in areas outside of Taiwan. This reduces a ton of risk with the stock. Although TSMC already has industry-leading 3 nanometer chips available, it's slated to launch 2nm and 1.6nm chips in late 2025 and 2026, respectively. While these chips can be configured to have greater speed, power consumption is the real innovation with these two technologies. When configured at the same speed level as 3nm chips, 2nm chips will see a 20% to 30% improvement in power consumption, and 1.6 nm chips will see a 15% to 20% improvement on top of that. Power consumption is a massive cost for operating data centers, and any technology that can improve this will be incredibly popular. This could be a huge growth driver for TSMC, as companies may find upgrading to computing units with 2nm or 1.6nm chips more cost-effective than running power-hungry older generations. Many tailwinds are blowing in TSMC's favor. The combination of new technology and an increasingly intense AI arms race has caused demand for TSMC's chips to boom. Management has discussed this at length during its conference calls, leading it to give investors guidance that AI-related chip revenue will grow around a 45% compound annual growth rate (CAGR) over the next five years. Companywide, it expects its revenue CAGR to approach 20%. That's monster growth over five years, and if management slightly exceeds expectations and delivers a 20% revenue CAGR, its revenue will increase by nearly 150%. Few companies can deliver that kind of growth, and if TSMC delivers on those projections, it will be a must-own stock. Typically, when a stock is projected to grow at a market-beating rate over a considerable time period, it trades at a premium to the broader stock market. However, that's not the case with Taiwan Semiconductor's stock. At just shy of 21 times forward earnings, TSMC's stock is cheaper than the S&P 500, which trades for around 22 times forward earnings. This means that Taiwan Semi's stock isn't priced at a premium, and investors can have confidence that they're not overpaying. Taiwan Semiconductor has multiple strong reasons to buy the stock now. With the stock priced at the market average, it looks like one investors can buy like there's no tomorrow. Before you buy stock in Taiwan Semiconductor Manufacturing, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Taiwan Semiconductor Manufacturing 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 $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $804,688!* Now, it's worth noting Stock Advisor's total average return is 957% — a market-crushing outperformance compared to 167% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Keithen Drury has positions in Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy. 4 Reasons to Buy Taiwan Semiconductor Manufacturing Stock Like There's No Tomorrow was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Phone Arena
22-05-2025
- Business
- Phone Arena
TSMC plays hardball with Trump administration over possible semiconductor tariffs
Last month, Commerce Secretary Howard Lutnick appeared on ABC-TV's "This Week" stating that smartphones, computers, chips, and others could be subject to "semiconductor tariffs" that could be imposed in May or June. The world's leading chip manufacturer, TSMC, has sent a message to the White House that tells the president that if he wants chips made in America, he needs to exempt TSMC and other companies that have agreed to build chip manufacturing facilities in the U.S. from tariffs and other import restrictions. Here's the deal. Only one of TSMC's fabs in Arizona is up and running at this point, which means that most of the company's production comes from the fabs it runs in Taiwan. Thus, any chips it exports to the U.S. will be subject to whatever semiconductor tariff that Trump pulls out of his head at that moment. TSMC is not interested in eating the amount of the additional import tax, but neither does it seem willing to pass the additional costs on to its U.S. customers. Instead, using the only leverage it has against Trump, TSMC is playing hardball and is hinting that it could make changes to its plans to expand in Arizona. Originally, TSMC agreed to spend $65 billion to build three fabs in the state, and one of them is now producing chips. That leaves two more fabs to be built, along with an additional three that TSMC said it would spend $100 billion to build. But if Trump decides to impose tariffs on foreign-made chips shipped to the U.S., TSMC might decide to slow down, delay, or even cancel the rest of its $165 billion investment. -TSMC in a letter to the U.S. Commerce Department TSMC even has a valid reason for making this threat. The foundry produces chips for U.S. tech stars like Apple, AMD, Nvidia, and others. In a letter sent to the U.S. Commerce Department, TSMC wrote, "Lower market demand for our leading US customers' products may consequently reduce demand for TSMC's manufacturing capacity and service onshore." TSMC has started building its third plant in Arizona, which will manufacture 2nm and A16 (1.6nm) chips using TSMC's best-in-class Super Power Rail backside power delivery. The latter allows silicon wafers to receive power from the back instead of the front of the wafer, where it has to compete for space with transistors and other connections. This will improve the performance of chips made using this technology. The Arizona facility is not just important to the U.S. to make it more self-sufficent in chip manufacturing, it is also a big deal to TSMC itself. The facility "will ultimately comprise around 30% of TSMC's total worldwide capacity for 2nm and more advanced technology nodes," the company says. That should allow TSMC to meet U.S. semiconductor demand from U.S. fabs. As enticing as this sounds to Trump, TSMC hints that it will all go away unless tariffs on semiconductors are dropped.
