10 Reasons to Buy and Hold This Tech Stock Forever

Stefon Walters, The Motley Fool

Sat, Jul 12, 2025, 4:02 PM 5 min read

• Taiwan Semiconductor Manufacturing (TSMC) is by far the largest provider of ultra-advanced semiconductors.

• Management estimates revenue from artificial intelligence (AI) accelerators will grow in the mid-40% range until 2029.

• The company has steadily increased its capital investments to account for growing demand.

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Semiconductor (chip) manufacturing giant Taiwan Semiconductor Manufacturing (NYSE: TSM) recently joined the elite trillion-dollar club, becoming one of only 10 companies with a market cap of over $1 trillion (as of July 8).

The company, also known as TSMC, has experienced a lot of growth in recent years, and its momentum is still going strong. In fact, it's one of my favorite stocks right now, and I plan to hold it for the long haul. Here are 10 reasons why.

When it comes to semiconductor manufacturing, there's TSMC, and there's everyone else. TSMC has around a 70% market share of the semiconductor foundry market, far exceeding its next closest competitors.

There's no clear path for any competitor to get close to TSMC's market share anytime in the foreseeable future.

TSMC doesn't sell products directly to consumers, but its chips are found in many of the electronics they use daily. TSMC's customers include Apple (smartphones, tablets, etc.), Nvidia (GPUs), Tesla (self-driving technology), AMD (CPUs), and dozens of other tech heavyweights.

In the first quarter (Q1), TSMC's revenue was $25.5 billion, up 35% year over year (YOY). Its net income increased 60% YOY (in local currency), continuing its impressive financial performance over the past five years.

TSMC's customers typically sign long-term contracts, helping to keep its revenue predictable as well.

TSMC makes most of the high-powered chips essential to the AI ecosystem. Smartphones used to be the largest segment for TSMC's business, but the new AI demand has shifted the landscape. Managment estimates revenue growth from AI accelerators will have a compound annual growth rate (CAGR) in the mid-40% range until 2029.

Developing a semiconductor manufacturing plant is far from easy, which is why some of the world's richest, most technologically advanced companies have yet to build their own and continue to rely on TSMC.