As artificial intelligence infiltrates an ever-increasing range of industries, Nvidia (NVDA) is hailed as the king of AI. But Taiwan Semiconductor (TSM), also known as TSMC, is the main power behind that throne. And now both Nvidia and Taiwan Semi scored new buy points in an attempt to extend their dominance.
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Besides Nvidia, TSMC works with most of the biggest chip designers. Its partners include Advanced microsystems (AMD), Arm holds (ARM), Broadcom (AVGO), Apple (AAPL), Marvell Technology (MURLY) And Qualcomm (QCOM).
Founded in 1987, TSMC created the foundry business model for the semiconductor industry, consisting of semiconductor manufacturing plants and integrated circuit design operations.
Today, it operates on four large markets: smartphones, high performance computing, automotive electronics and Internet of Things, or IoT.
TSMC, Nvidia and Synopsys drive AI innovation
In March, TSMC and leader in system design solutions Synopsis (SNPS) announced their move into production with Nvidia’s computational lithography platform.
In the press release, Nvidia said the collaboration between the three companies will push the boundaries of physics for the next generation of advanced semiconductor chips.
Noting that computational lithography is the cornerstone of chipmaking, Jensen Huang, founder and CEO of Nvidia, said his company’s partnership with TSMC and Synopsys “applies accelerated computing and generative AI to unlock new frontiers for semiconductor scaling.”
TSMC powers the next generation of AI
Last month, TSMC unveiled other innovations at North American Technology Symposium 2024. The company announced its all-new semiconductor process, advanced packaging and other technologies to power the next generation of AI innovations.
“We are entering an AI-driven world, where artificial intelligence works not only in data centers, but also in PCs, mobile devices, automobiles and even the Internet of Things,” said the CEO CC Wei.
In April, TSMC also announced plans to build a third state-of-the-art factory in Arizona.
The company continues to work toward completing its first manufacturing plant as it builds a second at its Arizona subsidiary. The third factory brings TSMC’s total capital expenditures for the Phoenix, Arizona site to more than $65 billion. This makes it the largest foreign direct investment in a new project in U.S. history. (A new project is one built from scratch, with no infrastructure or systems in place.)
TSM stock appears to be breaking out alongside Nvidia
Nvidia formed a pattern with a buy point of 974. With results due on May 22, the stock surpassed its 50-day moving average earlier this month and remains on top.
Taiwan Semiconductor stock created a double bottomA common chart template in turbulent markets. Like Nvidia, TSMC is above its 50-day mark. The semiconductor giant is trading about 5% below the 148.43 buy point.
TSMC retook the 50-day line shortly after reporting a Profits higher in the first quarter on April 18. After a series of quarters showing slowing growth, TSMC reported a sales gain of 11% to $18.5 billion and a profit increase of 4% to $1.36 per share.
Analysts expect growth to continue, with forecasts for a 16% jump to $6.12 per share in 2024. For next year, Wall Street expects a 25% gain to $7.63 dollars per share.
Follow Matthew Galgani on X, formerly Twitter, at @IBD_MGalgani.
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