3 Reasons Taiwan Semiconductor Is a Must-Buy for Long-Term Investors

Taiwan Semiconductor Manufacturing Company (TSMC) has emerged as a dominant player in the semiconductor industry, with a strong market position and a track record of innovation. As a long-term investor, there are several compelling reasons to consider adding TSMC to your portfolio.



1. Technological Leadership and Market Dominance
TSMC's technological prowess and market dominance are key factors that make it an attractive investment option. As of 2021, TSMC holds a significant market share for 7nm and smaller chips, with a 56% market share for these advanced nodes (Productmint). This technological advantage allows TSMC to cater to the growing demand for advanced chips in sectors such as smartphones, artificial intelligence, and automotive. Additionally, TSMC accounted for 44% of the global semiconductor foundry revenue in 2020, highlighting its substantial revenue generation capabilities. In the third quarter of calendar 2023, TSMC's revenue reached $17.249 billion, securing a 57.9% foundry revenue market share (TSMC Annual Report). This demonstrates TSMC's ability to maintain its leadership and competitive edge in the semiconductor industry.



2. Strategic Partnerships with Major Tech Companies
TSMC's strategic partnerships with major tech companies like Apple and Nvidia have significantly contributed to its revenue growth and market position. These collaborations enable TSMC to provide cutting-edge chipsets required to power advanced products, making it an indispensable partner for these tech giants. For instance, Apple, one of TSMC's largest clients, accounted for 25% of TSM's revenue in Q3 2024. Apple's recent AI-driven growth has significantly benefited TSMC, with Nvidia contributing $7.73 billion to TSM's revenue in 2023. These strategic relationships position TSMC as an essential player in the tech industry, supporting next-generation technologies and market leaders.



3. Continuous Innovation and Breakthroughs
TSMC's commitment to research and development has led to numerous technological breakthroughs, setting new benchmarks for competitors. The company invests heavily in exploring new materials, processes, and techniques to improve the efficiency, performance, and reliability of its semiconductors. This relentless pursuit of innovation has propelled TSMC to be an industry leader and has driven progress across various sectors. TSMC's continuous innovation ensures that it stays ahead of the competition and adapts to the evolving needs of the market, solidifying its position as a long-term investment opportunity.

In conclusion, TSMC's technological leadership, market dominance, strategic partnerships, and continuous innovation make it an attractive long-term investment option. As an investor, considering these factors can help you make an informed decision about adding TSMC to your portfolio. However, it is essential to conduct thorough research and stay up-to-date with the latest developments in the semiconductor industry to make the most of your investment.