Semiconductor has more legs

ASML and $Taiwan Semiconductor Manufacturing(TSM)$ are scheduled to post their latest quarterly earnings results on 18 & 19 October respectively. Both semiconductor companies are leaders in their respective fields.

ASML is the only lithography equipment manufacturer capable of producing Extreme Ultraviolet (EUV) scanners that indispensable for the most advanced semiconductor technologies with the smallest geometric features that power advanced microchips in the latest mobile phones and other electronic devices.

On the other hand, TSMC is the leading semiconductor foundry offering manufacturing as a services to hundreds of semiconductor design companies, including $Apple(AAPL)$ , $Advanced Micro Devices(AMD)$ and Nvidia. In fact, TSMC is the largest customer of ASML by the sheer capacities of its various fabs churning out thousands of wafers every day, whereas Apple, Nvidia and AMD are the biggest customers of TSMC. It helps that these are among the fastest growing companies producing among the most highly sought products from iPhones to artificial intelligence, gaming and data center chips. Even big techs the likes of $Microsoft(MSFT)$ and $Alphabet(GOOG)$ are increasingly designing their own proprietary microchips and contracting TSMC to manufacture them, and these big techs are growing in prominence, with their products and services so prevalent in our everyday life.

Both ASML and TSMC wield great powers in their respective field, given their technological and market leaderships.

With the long-term increasing demands for semiconductor chips, and with artificial intelligence driving the next phase of growth, I believe that both companies will have more legs to run.

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