From The Motley Fool · Harsh Chauhan · · 1m 30s
AI Chip Monopoly Stocks: TSMC vs. ASML
Which AI semiconductor stock offers better monopoly growth: TSMC or ASML?
In brief
Which AI semiconductor stock offers better monopoly growth: TSMC or ASML? TSMC and ASML both show strong AI chip growth, but ASML's faster expansion justifies higher valuation for investors seeking long-term semiconductor gains. Originally reported by The Motley Fool.
Quick answers
- Which Stock to Buy?
- Investors seeking long-term semiconductor growth can choose ASML for higher growth potential or TSMC for a mix of growth and value.
- What is the key takeaway from AI Chip Monopoly Stocks: TSMC vs. ASML?
- TSMC and ASML both show strong AI chip growth, but ASML's faster expansion justifies higher valuation for investors seeking long-term semiconductor gains.
Semiconductor Demand Surge
The demand for ASML's machines has increased significantly as they are used to manufacture advanced chips for AI applications.
TSMC's Market Dominance
TSMC is the world's largest semiconductor foundry with 73% of the global foundry market share, ahead of the second-placed company's 7% share.
ASML's EUV Machine Role
ASML's extreme ultraviolet lithography machines print billions of transistors on chips using light, enabling smaller, faster, and more power-efficient chips.
TSMC's Revenue Growth
TSMC's revenue increased by 41% year over year to $46.7 billion in Q3, with 79% of revenue from chips using 7nm process nodes or smaller.
ASML's Revenue Growth
ASML's revenue increased by 55% year over year to 11.66 billion euros in Q3, with net income up 133% from the year-ago period.
ASML's Capacity Expansion
ASML plans to increase EUV machine production capacity by 30% next year and expand capacity by more than 30% in 2028.
TSMC's Pricing Power
TSMC's net profit margin increased by 5.4 percentage points year over year, leading to a 69% jump in earnings per share to $29.43.
Which Stock to Buy?
Investors seeking long-term semiconductor growth can choose ASML for higher growth potential or TSMC for a mix of growth and value.
At a glance
TSMC and ASML both show strong AI chip growth, but ASML's faster expansion justifies higher valuation for investors seeking long-term semiconductor gains.
