12 Best ADR Stocks To Invest In According to Analysts

9. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)

Upside Potential: 25.83%

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the world’s largest dedicated semiconductor foundry. The company manufactures advanced chips for major clients such as Apple, NVIDIA, Qualcomm, and AMD. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) cutting-edge technology, particularly in the production of 3nm and 5nm chips, places it at the forefront of the semiconductor industry. The increasing demand for high-performance computing, artificial intelligence, and 5G technology is driving its growth. Additionally, the company is investing heavily in expanding its production capacity.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is poised to dominate the semiconductor space with its cutting-edge 2nm chip technology. The company already has a dominance in advanced node technologies (3nm, 5nm, and 7nm)  which drives its leadership in the AI and high-performance computing (HPC) chip space. This dominance in advanced node technology ensures the company’s near-monopoly on high-demand chips and creates a significant entry barrier for competitors.

Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) upcoming 2nm (N2) chips will introduce the gate-all-around (GAA) transistor structure, which is a significant leap that will drive better power efficiency and performance compared to the current FinFET architecture. This innovation is essential as demand for high-performance chips continues to rise. The N2 node will offer 10% to 15% performance gains at the same power, while also cutting power consumption by 25% to 30% compared to N3E. The shift to N2 will enable a 15% improvement in transistor density, allowing chip designers to pack more computing power into smaller spaces.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is also building several new fabrication plants, which will increase its production capacity and solidify its position as the world’s leading semiconductor foundry. The company’s $11 billion investment in a new semiconductor fabrication plant in Dresden, Germany, represents a significant strategic shift toward regional diversification. This expansion will not only increase the company’s production capacity but also reduce its reliance on any single region, making it more resilient to potential disruptions.