Taiwan Semiconductor Manufacturing Company (TSMC) has a market capitalization of $1.1 trillion and holds approximately 67% of the semiconductor manufacturing market, with about 90% of the advanced chip market share. In the first quarter, TSMC reported a 42% increase in revenue, driven by demand for semiconductors, particularly in artificial intelligence.
TSMC is set to receive $6.6 billion in subsidies as part of the U.S. CHIPS Act, alongside $2 billion from the Chinese and Japanese governments, bolstering its competitive edge. The company enjoys a high profit margin of 49% and has outperformed the S&P 500, rising nearly 300% over the past five years and 800% over the last decade.
Despite its dominance, TSMC has been recognized as historically undervalued, trading at a price-to-earnings ratio of 25, which aligns with the S&P 500 average. Its significant customer base includes major tech firms like Apple, Nvidia, AMD, and Broadcom.
