TSMC and ASML Positioned for AI Infrastructure Boom
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Source: NASDAQ.COM
- Market Leadership: TSMC, as the world's largest semiconductor foundry, is benefiting from the rapid growth of AI infrastructure due to its near-monopoly in advanced logic chip manufacturing, which is expected to drive profit margins higher and enhance its competitive position in the market.
- Technological Innovation: ASML holds a monopoly on extreme ultraviolet (EUV) lithography technology, and as demand for advanced logic chips and memory increases, it is poised for significant growth in equipment sales, further solidifying its leadership in the semiconductor equipment market.
- Investor Dynamics: Billionaire investor Philippe Laffont significantly increased his stake in TSMC and established a new position in ASML during the first quarter, indicating strong confidence in semiconductor infrastructure companies and reflecting market recognition of their future growth potential.
- Price Hike Expectations: TSMC has informed customers of planned multiyear price increases, and combined with its high yield and low defect rates, this is expected to further enhance its profitability and market share, solidifying its critical role in the global semiconductor value chain.
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Analyst Views on TSM
Wall Street analysts forecast TSM stock price to fall
8 Analyst Rating
7 Buy
1 Hold
0 Sell
Strong Buy
Current: 412.320
Low
63.24
Averages
313.46
High
390.00
Current: 412.320
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 to Raise Advanced 3nm Prices by 15% in 2026
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- Positive Stock Reaction: Following the announcement, TSMC shares rose 5% in premarket trading on Wednesday, reflecting investor optimism about the company's future growth potential, especially amid surging demand for artificial intelligence technologies.
- Market Capitalization Growth: TSMC's success has propelled Taiwan's market capitalization to $4.95 trillion, surpassing India's $4.92 trillion, highlighting Taiwan's significant position in the global stock market and further solidifying TSMC's status as an industry leader.
- Dividend Distribution Decision: TSMC's board approved a quarterly dividend of NT$6.00003573 per common share, set to be paid on July 9, which not only enhances shareholder returns but also reflects the company's robust financial health.
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- Employee Pressure: Amid surging profits, employees have voiced concerns about bonus distributions on online forums, prompting management to address these expectations and dissatisfaction to maintain morale and loyalty among staff.
- Industry Comparison: Unlike TSMC, Samsung Electronics' union secured an agreement for approximately $27 billion in bonuses, translating to about $340,000 per chipmaking employee, highlighting differing strategies in employee incentive measures across the industry.
- Market Environment Impact: The increase in TSMC's profit sharing is not only a motivational tool for employees but also a strategic move to attract and retain talent in the increasingly competitive semiconductor industry, particularly in the context of rapid advancements in AI technology.
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- Surge in High-Performance Computing Revenue: Since 2020, the revenue share from high-performance computing chips has skyrocketed from 30% to 43%, with projections of reaching 61% by 2026, indicating TSMC's strong adaptability to technological advancements and market demand.
- Market Dominance: TSMC commands approximately 70% of the global chip manufacturing revenue, with major clients including Nvidia, Intel, and Apple, underscoring its irreplaceable position and competitive edge in the semiconductor industry.
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See More
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- Price Increase Announcement: TSMC plans to raise prices for its advanced 3-nanometer manufacturing node by 15% in the second half of 2026, with a potential additional 10% increase in 2027, which will directly impact its profitability and enhance market competitiveness.
- Positive Stock Reaction: Following the announcement, TSMC shares rose 5% in premarket trading on Wednesday, reflecting investor optimism about the company's future growth potential, especially amid surging demand for artificial intelligence technologies.
- Market Capitalization Growth: TSMC's success has propelled Taiwan's market capitalization to $4.95 trillion, surpassing India's $4.92 trillion, highlighting Taiwan's significant position in the global stock market and further solidifying TSMC's status as an industry leader.
- Dividend Distribution Decision: TSMC's board approved a quarterly dividend of NT$6.00003573 per common share, set to be paid on July 9, which not only enhances shareholder returns but also reflects the company's robust financial health.
See More
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- Profit Sharing Commitment: TSMC CEO C.C. Wei announced at a private meeting that Taiwan-based employees will see an average profit-sharing bonus increase of over 30% year-over-year, reflecting the company's significant profitability amid the AI development boom.
- Employee Pressure: Amid surging profits, employees have voiced concerns about bonus distributions on online forums, prompting management to address these expectations and dissatisfaction to maintain morale and loyalty among staff.
- Industry Comparison: Unlike TSMC, Samsung Electronics' union secured an agreement for approximately $27 billion in bonuses, translating to about $340,000 per chipmaking employee, highlighting differing strategies in employee incentive measures across the industry.
- Market Environment Impact: The increase in TSMC's profit sharing is not only a motivational tool for employees but also a strategic move to attract and retain talent in the increasingly competitive semiconductor industry, particularly in the context of rapid advancements in AI technology.
See More
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- Bath & Body Works Strong Performance: The retailer surged about 12% in premarket trading after reporting first-quarter results that exceeded Wall Street expectations, with adjusted earnings of $0.32 per share beating estimates by $0.03, and revenue of $1.38 billion surpassing expectations by roughly $20 million despite a 2.8% year-over-year decline, demonstrating resilience in challenging conditions.
- Rocket Lab Key Review Success: The company rose 6.24% in premarket trading after successfully completing a key program review for the U.S. Space Development Agency’s TRKT3 satellite constellation program, which has a budget exceeding $3.5 billion and aims to establish a 72-satellite constellation in low earth orbit to enhance missile warning and defense capabilities for the U.S. and its allies.
- TSMC Profit Sharing Surge: Taiwan Semiconductor Manufacturing gained 4.26% in premarket trading as CEO C.C. Wei promised over a 30% year-over-year increase in profit-sharing payouts for employees, alleviating concerns regarding the company's incentive plans and reflecting a strong commitment to employee welfare.
- Lululemon Cooperation Agreement: The athletic apparel company added 3.09% in premarket trading after announcing a cooperation agreement with founder Chip Wilson, who holds 8.7% of the stock, with new board members expected to enhance brand expertise, thereby improving corporate governance and strategic direction.
See More
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- Stock Price Increase: TSMC shares rose 1.6% in Wednesday's premarket session, nearing their all-time high, reflecting market optimism about future growth, particularly in light of NVIDIA's substantial investment plans.
- NVIDIA Investment Plan: CEO Jensen Huang announced NVIDIA will invest up to $150 billion in Taiwan to expand chipmaking capacity, which is expected to bring additional capital and resources to TSMC and other contract manufacturers, solidifying their leadership in the global semiconductor market.
- Market Sentiment Analysis: Despite bearish sentiment on Stocktwits for TSMC, the stock's price increase indicates investor expectations for future performance, especially following NVIDIA's announcement of establishing a headquarters and increasing investments in the region.
- Industry Dynamics: AMD CEO Lisa Su's recent visit to Taiwan and announcement of a $10 billion investment to ramp up manufacturing capacity highlights the rising chip demand, further enhancing TSMC's market opportunities.
See More
Nvidia to Invest Up to $150 Billion Annually in Taiwan
- Headquarters Development: CEO Jensen Huang announced plans to build Nvidia's headquarters in Taiwan, with construction set to begin next year, marking a significant commitment to the Taiwanese market and expected to enhance partnerships with manufacturers like TSMC.
- Increased Investment: Huang stated that Nvidia's annual investment in Taiwan will rise from $10 billion to $150 billion, reflecting optimism about AI chip demand and contributing to local economic growth.
- Stock Performance Issues: Despite Nvidia's strong quarterly report and an $80 billion share buyback announcement, the stock fell 0.4%, indicating market skepticism about its future performance and a shift in investor sentiment.
- Hiring Plans: The new headquarters is expected to employ 4,000 people, which will not only enhance Nvidia's operational capabilities in Taiwan but also create numerous job opportunities locally, further solidifying its position in the global AI supply chain.
See More
Taiwan Semiconductor: AI-Driven Growth Engine
- Significant Revenue Growth: In Q1 2023, TSMC generated $35.9 billion in revenue with a net profit margin of 50.5%, a substantial increase from $19.6 billion and $0.29 EPS three years ago, highlighting the company's robust performance in the AI market.
- Surge in High-Performance Computing Revenue: Since 2020, the revenue share from high-performance computing chips has skyrocketed from 30% to 43%, with projections of reaching 61% by 2026, indicating TSMC's strong adaptability to technological advancements and market demand.
- Market Dominance: TSMC commands approximately 70% of the global chip manufacturing revenue, with major clients including Nvidia, Intel, and Apple, underscoring its irreplaceable position and competitive edge in the semiconductor industry.
- Rising Stock Price: TSMC's stock has risen 33% year-to-date, and as AI technology continues to evolve, the company is expected to benefit further, driving stock price increases and solidifying its market leadership.
See More
