Taiwan Semiconductor Manufacturing Company (TSMC) is a strong contender for long-term investment in AI chips.

1. Taiwan Semiconductor Manufacturing Company (TSMC) dominates the production of high-performance AI chips, with these chips accounting for 59% of its revenue in the first quarter of 2025.
2. TSMC has expanded its manufacturing operations globally to countries outside of Taiwan, reflecting the increasing demand for AI chips driven by the popularity of generative AI tools like OpenAI’s ChatGPT and Google Gemini.
3. Nvidia has seen a significant surge in stock value over the past three years, with its GPUs and AI software playing a crucial role in the AI ecosystem. TSMC, as the manufacturer of high-performance AI chips, is a key player in supporting Nvidia’s operations and the overall AI landscape.
4. TSMC’s revenue has been on the rise, with a 35% year-over-year increase in the first quarter of 2025. The company expects further growth in the second quarter, indicating the strong demand for AI chips and its pivotal role in the industry.
5. Despite geopolitical tensions between Taiwan and China, TSMC’s global expansion strategy, including manufacturing plants in the U.S., Germany, and Japan, aims to mitigate risks and maintain consistent growth as a leader in semiconductor manufacturing.
6. Trading at a premium compared to other AI stocks, TSMC’s stock remains a solid long-term investment due to its technological advancements, large customer base, and reliable growth potential in the AI industry. Investors should consider TSMC’s position as a key player in the AI ecosystem for sustained returns.
7. While TSMC wasn’t on the Motley Fool’s list of top 10 stocks, its consistent growth and pivotal role in AI chip manufacturing make it a strong contender for long-term investment. With the increasing demand for AI chips, TSMC’s strategic position in the market signals potential for substantial returns in the future.

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