1. Introduction – Why TSMC Matters to Investors
Taiwan Semiconductor Manufacturing Company, known as TSMC, is really important in today's tech world. It produces the chips that run new iPhones and helps businesses like Nvidia and Microsoft work with artificial intelligence. TSMC is the largest chip maker for other companies in the world and has over 60% of the global market. For people looking to buy stocks, TSMC gives a sneak peek into what technology might look like in the future. With the rising demand for AI, cloud technology, and 5G, the year 2025 is predicted to be very crucial for TSMC’s growth and its stock value.
2. TSMC’s Growth Story So Far
TSMC's journey to success is focused on making wise decisions and being imaginative. The business was established in 1987 and concentrated only on producing chips for other businesses.Currently, TSMC's main clients include Apple, Nvidia, AMD, and Qualcomm. Even in 2024, when the economy is not great, TSMC's sales have grown a lot because there is a big need for AI technology. Their share of the market is over 64%, which is larger than all of their rivals put together. This great growth makes investors have faith in TSMC for not only being stable but also for making money in the future.
3. NYSE:TSM – Expansion, Market Dominance, and the Future of Advanced Nodes
TSMC’s Unmatched Lead in Advanced Semiconductor Manufacturing
Taiwan Semiconductor Manufacturing Company, or TSMC, is clearly the top company in making semiconductors around the world. Their most recent results show this success: during the first half of 2025, they saw a 46% increase in revenue compared to the previous year. This growth is mainly because more people want their advanced chips that are smaller than 7 nm. In fact, advanced chips now make up almost 69% of all their revenue, a big jump from only 9% in 2018.
Additionally, TSMC's 3nm production gained another 5% of the market in 2025, showing that more of their best customers are choosing these products. At the same time, the older chips are making less money for the company, which shows their plan to focus more on high-end, profitable methods. To help with this plan, the company confirmed they will spend between $38 billion and $42 billion in 2025, mostly to grow their 3 nm and 2 nm production. They expect to start producing the 2 nm chips in large amounts during the second half of 2025, and they are already working on even better chips that are smaller than 2 nm for 2026 and beyond.
4. Technology Leadership – 3nm, 2nm, and Beyond
- U.S.
Expansion: De-Risking and Strategic Advantage
What makes TSMC special is its skill in staying ahead in chip technology. By 2025, the company plans to use its 3 nm production process for the newest devices and will begin making 2 nm chips later that same year. TSMC often has production rates over 90%, while other companies struggle to reach those levels. Customers pick TSMC not just because they produce powerful chips, but also because they focus on saving energy, which is super important for AI applications and mobile devices. TSMC already has plans for technology smaller than 2 nm, giving it an edge over competitors like Intel and Samsung in tech improvements.
TSMC's global expansion remains key to its long-term strategy, and the US is central to its de-risking efforts. The company is investing $65 billion in its Arizona "Fab 21" across three phases:
• Phase 1: $12 billion investment for 4 nm capacity (20,000 wafers/month, currently in production).
• Phase 2: $28 billion investment for 3 nm wafers, expected in 2026.
• Phase 3: $25 billion allocation for capacity nodes below 2 nm, targeted for 2028.
According to management's own estimates, up to 30% of 2nm capacity will eventually be US-based, a key hedge against geopolitical risks. However, cost challenges remain—wafers manufactured in Arizona are 10-20% more expensive than those in Taiwan. AMD's CEO even warned that US-made chips would cost 5-20% more than their Hsinchu counterparts. Still, TSMC's unrivaled yield of over 90% (compared to Samsung's yield of less than 50%) gives it pricing power, allowing for a seamless transfer of costs to key customers such as Apple, Nvidia, and Microsoft.
5. Revenue Mix: Riding the AI and HPC Wave
TSMC’s growth is now more connected to High-Performance Computing (HPC), which made up 60% of total earnings in the first half of 2025, up from 52% the previous year. This rise comes from the need for AI accelerators, GPUs, and special chips made by big companies like AWS, Microsoft, and Google.
Smartphones are still the second biggest source of income, and the automotive sector only brings in 5%, which helps lower the risk from tariffs. It's important to note that U.S. semiconductor tariffs, which are 100%, have not greatly affected TSMC because exceptions for creating products in America protect its U.S. operations. Customers have not changed their orders, which shows that TSMC is strong even with changing policies.
6. Key Competitors – Can Intel or Samsung Catch Up?
Competition in the semiconductor industry is tough, but TSMC has been able to stay ahead of its rivals. Samsung has struggled to make parts using its latest technology, leading companies like Qualcomm and Google to shift their production to TSMC. Intel, even with help from the US government, is falling behind and won't finish its 18A process until 2026. On the other hand, TSMC is making great progress with its 2 nm technology. This difference is important because customers need reliable products now, not just promises for the future. While Intel and Samsung are well-known brands, TSMC's dependable delivery makes it the preferred choice for leading tech companies.
7. TSMC’s Financial and Valuation Outlook
Financially,
TSMC is performing very well. Experts predict that its revenue will
increase by around 38% in 2025 because of the rising demand for AI, data
centers, and smartphones. Thanks to its efficient production process,
TSMC enjoys high profits, which allows it to set higher prices. At this
moment, TSMC's share price is around 25 times its expected earnings.
This seems fair considering its growth potential, especially when
compared to Intel's high stock value. Investors see a lot of room for
growth in the future, and the company is expected to grow its revenue by
20% each year over the next five years. In simple terms, TSMC has solid
fundamentals and creative plans for what’s next.
8. Technical Analysis – Valuation and Technical View
As of the latest trading day, TSMC shares are priced at $239.70, slightly below the key resistance point of $248.20. There is strong backing from the EMA50 at 228 dollars, and the EMA21 at 238.70 dollars shows that there is some power coming up soon. The RSI is at 53.6, which indicates that the stock could still rise before it becomes too expensive.
Looking at the value, TSMC appears to be a good buy. Its shares are priced at a forward P/E ratio of 24.8 and an EV/EBIT of 16.7, which are backed by solid financials. In comparison, Intel's shares are overpriced with a forward P/E ratio of 185 because its earnings have dropped significantly. Experts predict a 38% increase in revenue for 2025 and a yearly growth rate of 20 to 22% over the next five years, which matches what the company's leaders have suggested.
9. Investment Verdict: TSMC Is Still a Buy
With unmatched leadership in the 3nm and 2nm technology areas, top-notch production rates, a $65 billion expansion in the US that brings tariff advantages, and rising demand from AI and high-performance computing clients, TSMC clearly stands out from the competition.
The company's high market value is supported by a 39% increase in revenue and a 43.5% growth in EBITDA. Indicators suggest that there might be a pause in movement before another rise, with $248 acting as an important barrier and the chance to reach $300 in the medium term.
For investors who are keeping an eye on the leading companies in the semiconductor industry, NYSE:TSM is still a solid buy, promising both immediate growth opportunities and strong long-term leadership in the chip market.
10. Conclusion – Is TSMC a Buy in 2025?
Overall, TSMC checks off many boxes that investors look for. It leads in technology, has a loyal customer following, and is investing wisely worldwide for future growth. The rise of AI and cloud computing is creating huge demand, which will be more beneficial for TSMC than for other chip makers. While there are risks, the company's solid fundamentals and clear plan make it an appealing investment for 2025 and beyond. For those who want to be part of the semiconductor growth, TSMC offers both stability and the potential for profits—traits that are becoming hard to find in today’s market.
.jpeg)
0 Comments
ThankYou!