Be optimistic about TSMC! Foreign media praises "the biggest winner" and now is a good opportunity to enter the market

As the global AI infrastructure continues to expand, market funds are looking for the most potential beneficiary companies. From AI chip design, computing equipment to energy supply, there are investment opportunities in various fields, but which company has the best chance to stand out in this wave? Foreign media "The Motley Fool" analyzed that TSMC may be the most noteworthy target among them, and even described it as almost a "sure winner" in AI infrastructure investment.

The report pointed out that TSMC is a key supplier to major logic chip design companies in the world and is responsible for manufacturing self-designed chips for customers. Major AI computing chip companies, including NVIDIA, AMD and Broadcom, all rely on TSMC's foundry services.

The key is that the current production capacity of other wafer foundries is not enough to become an effective alternative to TSMC. According to reports, TSMC captured 72.5% of the global wafer foundry revenue market share in the second quarter. With its huge manufacturing scale and production capacity advantages, it will be difficult for other competitors to catch up in a short period of time, and it will not be easy for other competitors to steal major customers from TSMC.

In addition to its production capacity advantages, TSMC's technology and production yield are also important reasons why it is difficult for customers to switch partners. According to report analysis, TSMC has industry-leading process technology and good production yield performance, making it an extremely attractive partner for the AI ​​industry that requires high-performance chips.

As enterprises' demand for computing power continues to increase, AI chip orders are also expected to further boost TSMC's revenue. TSMC estimates that from 2024 to 2029, the compound annual growth rate of AI chip business revenue will reach the mid- to high-50% level.

TSMC Chairman Wei Zhejia also said at the third-quarter press conference that this growth rate "may be even higher," showing that the company is optimistic about the long-term demand for the AI ​​chip market. Foreign media believe that if AI infrastructure continues to expand, TSMC will be expected to continue to receive a large number of chip orders, further creating considerable returns for shareholders.

It is worth noting that in addition to its fundamental advantages, TSMC’s current valuation is also considered still attractive. The report pointed out that TSMC’s current estimated price-to-earnings ratio is about 23 times. Compared with the typical levels of the same period in previous years, the stock price is still at a relatively discounted position.

Therefore, foreign media believe that TSMC is not only an investment target worthy of long-term deployment in the wave of AI infrastructure construction, but the current stock price may also provide investors with a suitable opportunity to enter the market. The report concluded that TSMC may not necessarily be the company with the highest long-term return on investment in the AI ​​industry, but with its dominant position in the foundry market, technological advantages, and the rapid growth of its AI chip business, TSMC is almost certain to continue to benefit from this wave of AI infrastructure construction.