Taiwan Semiconductor (TSM): Is Now the Time to Buy?

2025-05-13 tsmc

New York, Tuesday, 13 May 2025.
Taiwan Semiconductor Manufacturing (TSM) saw a recent surge, closing at $186.98 on Monday, a 5.93% increase. Analysts are weighing the impact of easing US-China trade tensions and potential tariff shake-ups on semiconductor supply chains. Motley Fool included TSM in its top tech and AI stock picks for May and highlighted it as a “monster stock” for the next decade. Is TSM positioned for long-term growth, or are short-term market swings creating a buying opportunity? The company’s market capitalization is 811.95B.

Trade Tensions and Tariff Reductions

Easing trade tensions between the U.S. and China are influencing market sentiment [3]. A joint statement on May 12 indicated tariff reductions for the next 90 days [3]. The U.S. reduced tariffs on Chinese imports from 145% to 30%, while China lowered its import duties on U.S. goods from 125% to 10% [3]. This development contributed to a Wall Street rally, with technology and chip stocks leading a 3% overnight surge [3]. These tariff adjustments may positively impact TSMC by reducing supply chain costs and improving market access [alert! ‘impact size not quantified’].

Semiconductor Market Dynamics

TSMC operates in a sector heavily influenced by geopolitical factors and trade policies [1]. President Trump’s previous removal of a ban on chips moving in and out of China illustrates the impact of political decisions on the semiconductor industry [5]. However, potential future tariffs on semiconductors could disrupt supply chains, making it crucial for investors to monitor companies like TSMC closely [5]. The company’s involvement in manufacturing integrated circuits and wafer semiconductor devices positions it as a key player in various sectors, including PCs, communications, and automotive [1].

Key Metrics and Analyst Views

TSMC’s stock has experienced significant volatility, with a 52-week range of $133.57 to $226.40 [7]. The stock’s P/E ratio stands at 24.0597, and its yield is 1.10% [7]. On Monday, TSMC closed at 957.00 on the Taiwan Stock Exchange, which is 22.69% above its 52-week low of 780.00, recorded on April 9, 2025 [4]. Schwab’s Kevin Gordon describes the current market as a “pendulum market,” characterized by violent swings [3]. Kathy Jones from Schwab suggests that tariff changes are viewed relative to their starting points [3].

Market Performance and Future Outlook

On May 12, several semiconductor and AI stocks rallied, including NVDA, AVGO, AMD, and TSM [5]. The average S&P 500 earnings estimate has decreased from $273 to $265 over the last three months, indicating a cautious outlook [3]. The S&P 500’s forward price-to-earnings ratio is 21.35, exceeding the long-term average of around 18 [3]. Investors should consider these broader market trends and expert opinions when evaluating TSMC’s potential for future growth [3][5].

Bronnen

market data stock overview