TSMC is not the fastest growing company, so why is it still listed as the first choice for AI? Foreign media reveals key moat

TSMC is not the fastest growing company, so why is it still listed as the first choice for AI? Foreign media revealed the key moat. (Reuters)

[Financial Channel/Comprehensive Report] TSMC has long stood at the core of the global foundry industry, with customers ranging from Huida, Advanced Micro Devices, Apple and most large chip design companies, making it an almost unavoidable company in the AI investment boom. Foreign media therefore raised a question: Is TSMC the most worth buying AI stock now?

The article pointed out that TSMC is an artificial intelligence stock worth holding because it will almost certainly benefit from the AI ​​wave. What really sets it apart from other foundries is not just technology, but that there are almost no substitutes in the world that can provide the same scale of production capacity.

TSMC itself is a wafer foundry, responsible for actually manufacturing the chips designed by customers. Its customers range from Huida, AMD to Apple, covering almost the entire technology industry. Therefore, no matter which AI chip company finally obtains a higher market share, TSMC will have the opportunity to benefit from it.

The article pointed out that TSMC has always had leading technology, but what is really difficult to be replaced is its huge production scale. Even if customers want to transfer orders to other foundries, it will be difficult to complete it at once, and they may even not be able to find a substitute with sufficient production capacity at all, because currently no other company in the world has the same level of manufacturing capabilities as TSMC.

This capacity advantage also allows TSMC to maintain its huge market position and directly benefit from the rapid growth in chip demand driven by AI computing. In particular, TSMC produces chips for competing companies at the same time, which highlights its special position in the AI ​​supply chain.

Take Huida and AMD as an example. The two companies are competing in the data center market, but they are both TSMC customers. In addition, TSMC also manufactures chips for many other AI-related companies. The article believes that this ability to serve multiple competitors at the same time makes TSMC a more universal AI and technology investment target.

However, the article also pointed out that although TSMC is an obvious beneficiary of the AI ​​wave, it may not be the fastest-growing AI stock in terms of investment return potential. TSMC's revenue and profits have maintained quite good growth in recent quarters, but compared with AI chip companies such as Huida or Advanced Micro Devices, the growth rate is still relatively slow.

Foreign media emphasized that TSMC is a "good AI stock", but it may not be the most explosive one. The reason is that other AI companies may provide greater room for growth, while TSMC's own growth rate is still difficult to compare with that of some customers.

However, if investors are looking for a company that can benefit from the demand for AI in the long term, has a solid business position, and has a relatively high probability of success, the article believes that TSMC is still quite attractive. It may not be the fastest-growing stock in the AI ​​industry, but with its hard-to-replace production capacity and broad customer base, it is still regarded as an important target worth holding in an AI investment portfolio.