Artificial intelligence (AI) has become the single hottest investing trend over the past year and a half, and there is a good chance the rapid proliferation of this technology will continue to be a key growth driver for the stock market over the next decade as well.
After all, the global AI market is expected to generate almost $2.6 trillion in annual revenue in 2032 as compared to an estimated $538 billion last year. Buying and holding solid semiconductor stocks for the long run is one of the best ways to capitalize on this huge opportunity. That’s because training and deploying AI models isn’t possible without AI chips.
This explains why top companies and governments have been lining up to buy chips from the likes of Nvidia, sending shares of the graphics specialist soaring thanks to the stunning growth on its top and bottom lines. However, you should also consider buying another chipmaker to make the most of the AI boom: Taiwan Semiconductor Manufacturing (NYSE: TSM).
TSMC is a solid play on the AI chip boom
Popularly known as TSMC, the Taiwan-based foundry giant is at the heart of the AI semiconductor market as its process nodes are allowing customers such as Nvidia to produce powerful chips. For example, Nvidia’s Hopper architecture, which allowed the company to become the dominant player in the AI chip market, was based on TSMC’s 4N manufacturing process.
And now, Nvidia is going to manufacture its next-generation Blackwell AI processors using TSMC’s 4NP process. However, Nvidia is not the only one queueing up to get its hands on TSMC’s chips. Intel has reportedly tapped TSMC’s 3-nanometer (nm) chip-production line to manufacture processors for notebooks.
It is worth noting that Intel itself is a chip manufacturer, unlike Nvidia, which only designs its chips and outsources their fabrication to TSMC. However, Intel has fallen behind in the race to develop advanced chips, which is why it has been tapping TSMC for manufacturing. Given that TSMC has been consistently pushing the envelope on the product-development front and is set to move to more advanced process…
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