TSMC Dividend Stock Ready To Buy Now

Taiwan Semiconductor Manufacturing (NYSE: TSM) recently faced a setback in its stock performance. Best time to buy Dividend TSMC.

Here are key factors to weigh when contemplating an investment in TSMC:

Pros:

1. Industry Leadership: TSMC stands as a dominant force in the semiconductor foundry sector.
2. Global Demand: Its semiconductor production caters to diverse sectors, including computing, smartphones, IoT, automotive, and consumer electronics.
3. Investment in Capacity Expansion: TSMC actively invests in expanding its manufacturing capacity to meet escalating demand.
4. Steady Growth: Despite market fluctuations, TSMC has consistently demonstrated growth over time.

Cons:

1. Market Volatility: TSMC, like any other stock, is susceptible to market fluctuations.
2. Cyclical Nature: The semiconductor industry’s cyclicality can impact TSMC’s performance.
3. Valuation: Consider evaluating TSMC’s current valuation and its alignment with your investment objectives.

Global Semiconductor Market Forecast:

• The global semiconductor market is projected to reach a value of US$515 billion in 2023 and is expected to continue growing in 2024.

Taiwan’s Semiconductor Industry Performance:

• Taiwan’s semiconductor industry demonstrated remarkable double-digit expansion in 2022, surpassing the global average.

Major Semiconductor Industry Sectors:

• IC Design: Involves companies engaged in designing integrated circuits (chips).
• IC Manufacturing: Encompasses firms involved in manufacturing semiconductor wafers.
• IC Packaging and Testing (OSAT): Includes entities specializing in packaging and testing finished chips.

Top Companies in Each Sector:

• The report provides a top-10 company ranking for each sector, featuring notable companies such as TSMC (Taiwan Semiconductor Manufacturing Company), MediaTek, and UMC (United Microelectronics Corporation).

Taiwan’s Global Position:

• Taiwan plays a crucial role in the semiconductor industry’s global supply chains.
• The industry’s shipment value in Taiwan is predicted to exceed NT$3.85 trillion (US$125 billion) in 2023.

For more detailed information, you can explore the full report on ResearchAndMarkets.com.

Why you Invest in TSMC ?

Despite holding the title of the world’s largest foundry and enjoying a significant technological edge in chipmaking, Taiwan Semiconductor Manufacturing (NYSE: TSM) recently faced a setback in its stock performance. Despite surpassing expectations in revenue and earnings for the first quarter, TSMC’s stock dipped, landing roughly 20% below its recent peak.

The reason behind this decline likely stems from TSMC’s adjustment of its full-year 2024 forecast for semiconductor industry growth. Previously anticipated to exceed 10%, the forecast was revised to around 10%. However, the reaction appears exaggerated considering that the downward revision primarily pertains to the automotive chip market. This market, which thrived post-pandemic until 2023, is now witnessing a downturn reminiscent of the PC, smartphone, and data center markets in 2022-2023.

Despite this specific market challenge, TSMC remains robust. Thanks to its dominant position, the company maintains its growth target for the year, estimated to be in the low- to mid-20% range. TSMC’s exceptional growth is largely fueled by the artificial intelligence chip market, which is projected to grow at an astonishing 50% compound annual growth rate over the next five years. This sector is poised to elevate from a single-digit revenue share for TSMC to over 20% by 2028.

Thus, while the adjusted forecast may have cast a negative shadow on some chipmakers, TSMC’s core strength and growth prospects remain intact, providing little justification for the sell-off.

Additionally, TSMC is scaling back its capital spending after significant investments in recent years. Despite projecting over 20% revenue growth this year, the company plans to allocate capital equipment expenditures similar to last year’s level.

This adjustment is resulting in a surge in free cash flow, reaching approximately $8 billion in the first quarter alone, significantly exceeding the company’s $2.5 billion dividend payments. However, considering TSMC’s intention to eventually distribute 70% of free cash flow as dividends, there remains ample opportunity for the company to enhance its current 1.6% payout.

How to Buy TSMC Stock:

TSMC’s American depository receipts (ADRs) are listed on the New York Stock Exchange (NYSE) under the ticker symbol TSM.

To invest, follow these steps:

1. Open a brokerage account with a reputable platform.
2. Determine your investment budget.
3. Allocate funds, considering diversification across multiple stocks.
4. Execute the purchase of TSMC stock through your brokerage account.

Remember: Investing carries inherent risks, so it’s crucial to conduct thorough research and align your investment decisions with your financial goals.