Semiconductor (chip) production giant Taiwanese semiconductor production (NYSE: TSM) Recently joined the elite trillion dollar club, connected to one of the 10 companies from only 10 trillion dollars (from July 8) with a market cap.
The company, known as TSMC, has experienced a lot of growth in recent years and the momentum is still strong. In fact, this is one of me Favorite stocks right nowAnd I plan to hold it for a long time. Here are 10 reasons.
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When I came Semiconductor productionThere is a TSMC and everyone has. TSMC has a market share of 70% of the semiconductor casting market, which is more than their next closest competitors.
There is no open way for any opponent to approach TSMC’s market share in the near future.
TSMC products do not sell directly to consumers, but its chips are found in many electrons they use daily. TSMC’s customers include Apple (smartphones, tablets, etc.), Nvidia (GPUs), Tesla (self-management technology), Very (CPU) and other technological weights with them.
In the first quarter (Q1), the revenues of the TSMC were $ 25.5 billion, 35% (yoy) in the year. His net income continued to operate effectively in the last five years, 60% yoy (local currency) increased.
TSMC’s customers usually sign long-term contracts, help keep their income in advance.
TSMC is the majority of high-powered chips that are important for the AI ecosystem. Smartphones were the largest segment for TSMC’s work, but the new AI demand changed the picture. Management calculation will be a compound annual growth rate (CAGR) in the range of income growth from AI accelerators to 2029.
The development of the semiconductor production plant is easy, so some of the richest, most technologically advanced companies in the world should still build themselves and trust in TSMC.
To reach a point where it works effectively, many investment capital is inexplicated technology and annual development years. This TSMC helps keep opponents in the distance.
A concern with TSMC’s work was geopolitical tension between Taiwan and China. Against this risk, the company began to expand its activities outside Taiwan.
TSMC currently produces plants in Taiwan, USA, Germany and Japan, or produces soon.
I wouldn’t think TSMC’s dividend shareholder, but the last stock offers a dividend that completes price growth. His dividend product is 1.17% (from July 8), the lower S & P 500 average. However, the average dividend of the average dividend in the last three years is higher than S & P 500.
The modest dividend can still contribute to your total income over long driving.
Semiconductors are measured in nanometers (NM) – 7nm, 5NM, 3NM and 2NM in the upcoming Nanometers (NM), are classified in the production process. Small node, the more powerful and advanced semiconductor.
TSMC effectively has a monopolist in producing and selling the most advanced semiconductor in the world. Other companies do not match the effectiveness of the TSMC and the scale of a scale that can build them.
TSMC has consistently invested in developing his work, but it has begun to spend this requirement to the AI chips. In 2024, the capital expenditures of the TSMC are more than $ 30 billion. This year, this number expects to increase to $ 38 billion and $ 42 billion.
TSMC, higher capital expenditures are directly linked to the growth opportunities that need to be music on investors’ ears.
When investing in a company for a long time, you want someone who shows the test of someone who shows it. Since 1987, TSMC navigated the application of various economic periods, new technologies and geopolitical tensions.
During each step, this has made himself for long-term growth and placed himself and has a little reason to believe that it will not last for it.
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Stephone Walters There are positions in the production of Apple and Taiwan’s semiconductor. Motley has Foox positions and recommends advanced micro devices, Apple, Nvidia, Taiwanese semiconductor production and Tesla. Motley Fool has a Disclosure Policy.
