Podcast: Japan's quest for the most powerful microchip leads semiconductor revival
Written by Emily J. Thompson, Senior Investment Analyst
0mins
Should l Buy TSM?
Source: Newsfilter
Japan's Semiconductor Industry Revival: Japan is investing billions in subsidies to revitalize its semiconductor industry, focusing on the newly established Rapidus Corporation, which aims to produce advanced 2 nanometer chips by 2027, despite facing competition from global leaders like TSMC and Samsung.
Geopolitical Context and Market Position: The revival efforts are driven by both economic growth and national security concerns, as Japan seeks to reduce reliance on foreign semiconductor supplies amidst increasing geopolitical tensions, while leveraging its strengths in niche materials and precision tools within the semiconductor supply chain.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy TSM?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on TSM
Wall Street analysts forecast TSM stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for TSM is 313.46 USD with a low forecast of 63.24 USD and a high forecast of 390.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
8 Analyst Rating
7 Buy
1 Hold
0 Sell
Strong Buy
Current: 348.850
Low
63.24
Averages
313.46
High
390.00
Current: 348.850
Low
63.24
Averages
313.46
High
390.00
About TSM
Taiwan Semiconductor Manufacturing Co Ltd is a Taiwan-based integrated circuit foundry service provider. The Company is primarily engaged in integrated circuit manufacturing services. It offers advanced process technologies, specialised process solutions, advanced photomask and silicon stacking, and packaging-related technologies, while supporting a comprehensive design ecosystem. The Company's products serve diverse electronic sectors including artificial intelligence, high-performance computing, wired and wireless communications, automotive and industrial equipment, personal computing, information applications, consumer electronics, smart internet of things, and wearable devices.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
TSMC Reports Continued Growth in Q4 Earnings
- Significant Revenue Growth: TSMC's Q4 revenue reached $33.73 billion, reflecting a 25.5% year-over-year increase, demonstrating strong demand in the semiconductor market and reinforcing its leadership position.
- Strong Profit Margins: The company reported a profit margin of 48.3%, indicating its competitive advantage in high-end chip manufacturing, effectively controlling costs while achieving high returns.
- Advanced Process Technology: In 2023, over half of TSMC's revenue came from chips larger than 7nm, with significant increases in the production of 3nm and 5nm chips, as 3nm chips accounted for 28% of total shipments, showcasing ongoing investment in technological innovation.
- Robust Market Demand: With the rapid advancement of artificial intelligence technologies, TSMC is experiencing increasing customer demand, solidifying its status as the world's largest chip foundry and is expected to benefit from the growth in AI infrastructure investments.
See More
TSMC: The Winner in the AI Era
- Market Growth Potential: According to Fortune Business Insights, the AI market is projected to grow from $375.9 billion this year to $2.48 trillion by 2034, representing a compound annual growth rate of 26.6%, which presents significant opportunities for related companies.
- TSMC's Industry Position: As the world's largest semiconductor foundry, TSMC produced over 11,800 products across 288 different processes in 2024, demonstrating its unparalleled influence and customer base in the industry.
- Strong Financial Performance: TSMC reported fourth-quarter revenue of $33.73 billion, a 25.5% increase year-over-year, with a profit margin of 48.3%, indicating robust profitability in a rapidly growing market.
- Technological Advancements and Market Demand: TSMC derived over half of its revenue from chips larger than 7 nanometers in 2023, but has significantly increased production of 3nm and 5nm chips, which now account for 28% and 35% of total shipments respectively, showcasing its agility in adapting to technological advancements and market demand shifts.
See More
Investment Opportunities and Risks in AI Stocks
- Market Performance of AI Stocks: In recent years, AI stocks have driven the S&P 500 to three consecutive years of gains, with companies like Nvidia and Palantir reporting double and triple-digit revenue growth, showcasing the revolutionary potential of AI technology across various sectors.
- Valuation Concerns Intensify: Despite strong performance, the S&P 500 Shiller CAPE ratio has reached historical highs, raising investor concerns about a potential AI bubble, leading some to rotate out of AI and tech stocks.
- Sustained Demand: Chip manufacturers like Taiwan Semiconductor and AMD reported double-digit revenue growth, indicating strong demand for AI products, particularly as TSMC's close collaboration with cloud providers offers clear insights into market demand.
- Long-Term Investment Opportunity: Although AI stocks have recently declined, analysts suggest this could represent a once-in-a-decade buying opportunity, especially as AI technology remains in its early stages, with significant future applications in robotics, drug discovery, and autonomous vehicles.
See More
Tech Stocks Retreat Amid AI Concerns
- Tech Stock Retreat: Recent declines in tech stocks, particularly AI names like Nvidia and Palantir, stem from investor concerns over valuations and the potential impact of AI on software businesses, indicating a cautious market sentiment.
- AI Market Potential: Despite risks, AI technology is viewed as a key driver for future growth, with companies like Taiwan Semiconductor and AMD reporting double-digit revenue gains, suggesting strong demand for AI products and the likelihood of increased investment.
- Investor Sentiment Shift: The S&P 500 Shiller CAPE ratio has reached historical highs, raising fears of an AI bubble and leading to declines in certain software and AI stocks, reflecting skepticism about sustained growth.
- Long-Term Investment Opportunity: Although tech stocks are experiencing short-term pullbacks, analysts believe this could represent a once-in-a-decade buying opportunity, especially as AI technology is still in its early stages of real-world application, indicating significant growth potential ahead.
See More
Taiwan VP Reiterates Semiconductor Manufacturing Capacity Concerns
- Semiconductor Capacity Statement: Taiwan's Vice Premier Cheng Li-chiun stated that moving 40% of semiconductor manufacturing capacity to the U.S. is impossible, highlighting Taiwan's critical role in the global semiconductor supply chain and potentially impacting U.S. tech strategies.
- International Investment Strategy: Cheng emphasized that Taiwan's international expansion and investments in the U.S. will be based on the premise of continued domestic investment, indicating Taiwan's strategic autonomy in the global market and commitment to its local economy.
- Workday CEO Transition: Workday announced the immediate return of co-founder Aneel Bhusri as CEO, succeeding Carl Eschenbach, which underscores the company's focus on leadership during the AI era and may influence market performance and shareholder confidence.
- AppLovin Report Retraction: Capitalwatch retracted a negative report on AppLovin, acknowledging significant inaccuracies, which not only helps restore Hao Tang's reputation but could also positively impact AppLovin's stock price.
See More
U.S. Secretary of Commerce Lutnick Faces Resignation Pressure
- Resignation Pressure: U.S. Representative Thomas Massie's public demand for Secretary of Commerce Lutnick's resignation, citing his ties to Jeffrey Epstein, indicates increasing political pressure that could jeopardize Lutnick's position stability.
- Market Prediction Shift: On Polymarket, Lutnick's likelihood of leaving the administration in 2026 is rated at 53%, closely aligning with Kash Patel's 55%, reflecting heightened uncertainty in the market that may affect investor confidence.
- Economic Policy Impact: As a key advocate for Trump's economic policies, Lutnick's departure could directly impact ongoing tariff policies and the review of the USMCA, thereby influencing the operational environment for affected companies.
- Investor Attention: Lutnick's oversight of converting CHIPS Act grants into direct government equity, including a 9.9% stake in Intel, suggests that his exit could provide immediate relief for companies currently burdened by his trade agenda.
See More
TSMC Reports Continued Growth in Q4 Earnings
- Significant Revenue Growth: TSMC's Q4 revenue reached $33.73 billion, reflecting a 25.5% year-over-year increase, demonstrating strong demand in the semiconductor market and reinforcing its leadership position.
- Strong Profit Margins: The company reported a profit margin of 48.3%, indicating its competitive advantage in high-end chip manufacturing, effectively controlling costs while achieving high returns.
- Advanced Process Technology: In 2023, over half of TSMC's revenue came from chips larger than 7nm, with significant increases in the production of 3nm and 5nm chips, as 3nm chips accounted for 28% of total shipments, showcasing ongoing investment in technological innovation.
- Robust Market Demand: With the rapid advancement of artificial intelligence technologies, TSMC is experiencing increasing customer demand, solidifying its status as the world's largest chip foundry and is expected to benefit from the growth in AI infrastructure investments.
See More
TSMC: The Winner in the AI Era
- Market Growth Potential: According to Fortune Business Insights, the AI market is projected to grow from $375.9 billion this year to $2.48 trillion by 2034, representing a compound annual growth rate of 26.6%, which presents significant opportunities for related companies.
- TSMC's Industry Position: As the world's largest semiconductor foundry, TSMC produced over 11,800 products across 288 different processes in 2024, demonstrating its unparalleled influence and customer base in the industry.
- Strong Financial Performance: TSMC reported fourth-quarter revenue of $33.73 billion, a 25.5% increase year-over-year, with a profit margin of 48.3%, indicating robust profitability in a rapidly growing market.
- Technological Advancements and Market Demand: TSMC derived over half of its revenue from chips larger than 7 nanometers in 2023, but has significantly increased production of 3nm and 5nm chips, which now account for 28% and 35% of total shipments respectively, showcasing its agility in adapting to technological advancements and market demand shifts.
See More
Investment Opportunities and Risks in AI Stocks
- Market Performance of AI Stocks: In recent years, AI stocks have driven the S&P 500 to three consecutive years of gains, with companies like Nvidia and Palantir reporting double and triple-digit revenue growth, showcasing the revolutionary potential of AI technology across various sectors.
- Valuation Concerns Intensify: Despite strong performance, the S&P 500 Shiller CAPE ratio has reached historical highs, raising investor concerns about a potential AI bubble, leading some to rotate out of AI and tech stocks.
- Sustained Demand: Chip manufacturers like Taiwan Semiconductor and AMD reported double-digit revenue growth, indicating strong demand for AI products, particularly as TSMC's close collaboration with cloud providers offers clear insights into market demand.
- Long-Term Investment Opportunity: Although AI stocks have recently declined, analysts suggest this could represent a once-in-a-decade buying opportunity, especially as AI technology remains in its early stages, with significant future applications in robotics, drug discovery, and autonomous vehicles.
See More
Tech Stocks Retreat Amid AI Concerns
- Tech Stock Retreat: Recent declines in tech stocks, particularly AI names like Nvidia and Palantir, stem from investor concerns over valuations and the potential impact of AI on software businesses, indicating a cautious market sentiment.
- AI Market Potential: Despite risks, AI technology is viewed as a key driver for future growth, with companies like Taiwan Semiconductor and AMD reporting double-digit revenue gains, suggesting strong demand for AI products and the likelihood of increased investment.
- Investor Sentiment Shift: The S&P 500 Shiller CAPE ratio has reached historical highs, raising fears of an AI bubble and leading to declines in certain software and AI stocks, reflecting skepticism about sustained growth.
- Long-Term Investment Opportunity: Although tech stocks are experiencing short-term pullbacks, analysts believe this could represent a once-in-a-decade buying opportunity, especially as AI technology is still in its early stages of real-world application, indicating significant growth potential ahead.
See More
Taiwan VP Reiterates Semiconductor Manufacturing Capacity Concerns
- Semiconductor Capacity Statement: Taiwan's Vice Premier Cheng Li-chiun stated that moving 40% of semiconductor manufacturing capacity to the U.S. is impossible, highlighting Taiwan's critical role in the global semiconductor supply chain and potentially impacting U.S. tech strategies.
- International Investment Strategy: Cheng emphasized that Taiwan's international expansion and investments in the U.S. will be based on the premise of continued domestic investment, indicating Taiwan's strategic autonomy in the global market and commitment to its local economy.
- Workday CEO Transition: Workday announced the immediate return of co-founder Aneel Bhusri as CEO, succeeding Carl Eschenbach, which underscores the company's focus on leadership during the AI era and may influence market performance and shareholder confidence.
- AppLovin Report Retraction: Capitalwatch retracted a negative report on AppLovin, acknowledging significant inaccuracies, which not only helps restore Hao Tang's reputation but could also positively impact AppLovin's stock price.
See More
U.S. Secretary of Commerce Lutnick Faces Resignation Pressure
- Resignation Pressure: U.S. Representative Thomas Massie's public demand for Secretary of Commerce Lutnick's resignation, citing his ties to Jeffrey Epstein, indicates increasing political pressure that could jeopardize Lutnick's position stability.
- Market Prediction Shift: On Polymarket, Lutnick's likelihood of leaving the administration in 2026 is rated at 53%, closely aligning with Kash Patel's 55%, reflecting heightened uncertainty in the market that may affect investor confidence.
- Economic Policy Impact: As a key advocate for Trump's economic policies, Lutnick's departure could directly impact ongoing tariff policies and the review of the USMCA, thereby influencing the operational environment for affected companies.
- Investor Attention: Lutnick's oversight of converting CHIPS Act grants into direct government equity, including a 9.9% stake in Intel, suggests that his exit could provide immediate relief for companies currently burdened by his trade agenda.
See More
