Not Nvidia. Not Micron. If I Could Buy and Hold Only 1 Artificial Intelligence (AI) Chip Stock Through 2030, It Would be This One.
Nvidia and Micron are frequently named in headlines featuring AI chip stocks, but another company may be the better long-term buy.
Overview
Every GPU that powers a model training cluster has to be built somewhere, and that somewhere is almost always a fab operated by Taiwan Semiconductor Manufacturing (NYSE: TSM). Taiwan Semi does not design the artificial intelligence (AI) chips that get the headlines. Instead, the company manufactures them at nodes no one else can reliably hit at scale.
That quiet competitive advantage has turned TSMC into the physical backbone of the AI infrastructure buildout. Nevertheless, the conversation still seems to start and end with Nvidia (NASDAQ: NVDA), Advanced Micro Devices (NASDAQ: AMD), or Micron Technology (NASDAQ: MU). The foundry that is actually printing the silicon rarely gets the same amount of airtime.
Details
This gap is strange once you understand how the AI chip stack works. While designers continue to fight over architecture and software, the constraint that decides how many of those designs actually ship is advanced-node capacity -- and TSMC owns most of that market.
Source
Originally published at www.fool.com.