Chipmaking powerhouse Taiwan Semiconductor Manufacturing (TSMC) might not grab headlines like other tech giants, but it plays a crucial role in powering much of today’s technology. Companies turn to TSMC to transform their chip designs into reality.
Over the past five years, TSMC’s stock has surged approximately 252%, significantly outpacing the S&P 500 index during the same period (as of July 14). While no one can predict the stock’s trajectory over the next five years, many expect it to keep climbing. The driving force? Its essential role in the artificial intelligence (AI) ecosystem.
TSMC’s semiconductors are vital for data centers, enabling the training and deployment of AI technologies. Its capabilities far surpass those of its competitors, establishing it as the preferred choice for AI chip manufacturing—a trend reflected in its financial performance.
Management at the Taiwanese firm anticipates its AI accelerator revenue will double this year, projecting a compound annual growth rate (CAGR) in the mid-40% range through 2029, beginning in 2024. This would significantly enhance TSMC’s already impressive revenue, which has more than doubled in the last five years.
With major AI players like Nvidia and Advanced Micro Devices heavily reliant on TSMC, the chipmaker is in a prime position to capitalize on the industry’s ongoing growth.
Increased AI adoption necessitates more AI training; this, in turn, drives demand for more data centers, which require additional chips—all of which depend on TSMC’s manufacturing prowess.
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