Taiwan Semiconductor Manufacturing: Ai Winner With Cyclical Upside

Summary

• TSMC's resilience and pricing power amid a semiconductor downturn highlight its dominant position in advanced chip manufacturing.
• AI demand and custom chip production for hyperscalers drive near-term growth, while non-AI markets are poised for cyclical recovery.
• TSMC trades at a compelling valuation, with geopolitical risks largely priced in and partially offset by U.S. expansion.
• We favor TSMC for its unmatched moat, secular growth, and ability to compound value, reflecting our conviction amid market uncertainty.

BING-JHEN HONG

The following segment was excerpted from the RGA Investment Advisors Q1 2025 Investment Commentary.

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Taiwan Semiconductor Manufacturing (NYSE:TSM) has been a standout in an otherwise challenged semiconductor landscape. While the AI segment has flourished, broader chip markets, autos, consumer electronics, industrials