Taiwan´s TSMC company will be one of the biggest beneficiaries of the heightened interest in AI.

The company aims to transition to 2-nanometer production technology, anticipating enhanced chip speed, reduced power consumption, and increased chip density. This move is expected to lead to cost savings and heightened capacity as more chips can be accommodated on a wafer.

Apple, TSMC’s primary client, has reportedly engaged with the company to secure exclusive access to its 2nm chip capacity, aiming to bolster its AI capabilities. Apple is said to have already secured TSMC’s 3nm capacity, resulting in Nvidia’s GPUs being manufactured using a 4nm process.

Simultaneously, there’s a surge in demand from both established players like Apple and Nvidia, and new entrants like Arm Holdings and Softbank, the latter reportedly planning to design a GPU and seeking production capacity from TSMC. Additionally, companies such as Meta Platforms, Amazon, and Alphabet have ventured into designing their own AI chips.

Amidst this flurry of activity, TSMC holds a commanding position with soaring demand and constrained production capacity, granting it significant leverage in negotiations and ample room for expansion. As AI technology is still in its early stages, TSMC is poised to emerge as a long-term leader in the AI chip domain.

Considering the robust demand for AI chips, TSMC appears to be uniquely positioned to capitalize on this lucrative market. With limited production capacity and strong demand, the company is poised for sustained growth in the foreseeable future. Given its attractive valuation, the stock seems like a compelling investment opportunity at its current levels.