Chip Stocks hardly hit on Monday in response to the launch of Chinese artificial intelligence (AI) Chatbot Deepseek. Several major stock of AI recorded double -digit, one -day losses.
Investors shook themselves because the creators of Deepseek could build a model that is capable of OPENAI Chatgpt and other chatboti leading in industry with less powerful chips and with significantly lower expenses. This launched bloodshed in the wider technology industry as investors responded to the possibility of stronger competition of American technological giants and weaker growth for chip shares.
This threat to fall in the price of chip and demand sent Taiwanese semiconductor (Nyse: tsm) Sprinkling 13.3% 27 January.
However, sale seems to be an excessive reaction. The impact of Deepseek is still unclear, and greater efficiency in the construction and training of AI models could actually lead to increased overall demand for technology and the semiconductors running them.
In other words, a sale could be a good opportunity to buy for Taiwan Semiconductor, who was a longtime market winner. Continue to read to see three reasons to buy shares.
Taiwan Semiconductor may be the most powerful company that most investors have never heard of.
The company operates behind the scenes in the technological industry, the products of partners like Apple,, Nvidia,, Broadcoand AMD. It is the world’s largest manufacturer of third parties by wide margins. TSMC produces most of the contracting chips in the world, and a market share of about 90% for advanced chips.
The semiconductors are vital in the global economy, which means that TSMC plays a key role in a wide range of products, including consumer electronics, devices and infrastructure.
This technological power gives a company a significant competitive advantage, and rivals love Intelligence and Samsung They have been failed lately, allowing him to gain a market share.
In the time of Ai, the growth of TSMC accelerated, and his profit margins expanded.
In the fourth quarter, the revenue jumped 39% to $ 26.9 billion, and reported a 49.0% operating margin, compared to 41.6% in the quarter before. The company has benefited from higher chips prices and an increasing share of advanced chips revenue.
TSMC issued strong guidelines for the first quarter, but there is a better reason to bet on the shares in the long run. It quickly opens up new fiction around the world, including the US (Arizona and Ohio), Europe and Asia, and should receive at least $ 6.6 billion funding from the Chips Act. These investments position the company continues to lead the industry, reducing the risk of concentrated trace of production in Taiwan.
