TSMC - Leader of the New Oil for the Decade

$Taiwan Semiconductor Manufacturing(TSM)$  definitely rings a bell for most investors out as it has cemented itself as the largest semiconductor foundry. While it may command only a market capitalisation of US$519.8B, it certainly has the potential to join the prestigious trillion-dollar club due to its leadership role in the semiconductor industry.

Rising Demand for Semiconductors

Semiconductors are the backbone of most modern technology, powering numerous industries from consumer electronics to automotive, data centre and many more.

With the rise of emerging technologies like Artificial Intelligence (AI) and autonomous vehicles, the demand for high-quality semiconductors will continue to exhibit an exponential growth. Companies such as $Microsoft(MSFT)$ and $Alphabet(GOOG)$  have demonstrated how AI can revolutionise the ways of working, potentially boosting productivity by multiple folds.

The demand for semiconductors is growing rapidly and the global market is expected to reach $1.3 trillion by 2025. The surge in demand for high quality semiconductor chips presents a significant opportunity for TSMC to boost its revenue and propel into the trillion dollar value status.

Leadership in Semiconductor Manufacturing

TSMC has been relentless in its pursuit of advanced manufacturing processes and cutting-edge chip technologies, solidifying its reputation as the go-to foundry for semiconductor. It has consistently dominated the market by commanding 59% of the market share. The next biggest player, i.e. Samsung, only holds 13% of the market shares.

TSMC’s continuous innovation and ability to deliver high-quality, high-performance chips with remarkable scale has attracted large global customers such as Apple, NVIDIA, and Qualcomm. Most notably, its existing 3nm process technology is one of the most advanced chip process in the world, and this is one of the key drivers for attracting a strong customer base. The partnerships provide opportunities for both TSMC and its clients to drive mutual growth as they push the boundaries for more advanced technology and higher revenue.

Risks amidst the bright prospects

With the rising important of semiconductor, its dominance in semiconductor manufacturing, continuous innovation and strong customer base, TSMC is poised to join our familiar tech giants in the trillion-dollar club. 

However, it is also imperative to note that there are geopolitical concerns on the prominence of Taiwan in the supply chain (highly unpredictable) as nations vie to control the semiconductor chips which is touted as the new oil of the decade. 

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