Should You Buy Semiconductor Shares Right Now? Why TSMC Matters

The question of whether to buy shares in a leading semiconductor manufacturer like Taiwan Semiconductor Manufacturing Company (NYSE: TSM) requires more than just looking at recent price movements. As the dominant force in the AI chip supply chain with unmatched manufacturing technology and scale, TSMC represents a compelling opportunity — though timing and risk assessment remain critical.

TSMC’s Unmatched Position in the AI Chip Supply Chain

Taiwan Semiconductor Manufacturing commands the global chip fabrication landscape with capabilities no competitor can easily replicate. The surge in artificial intelligence demand has transformed the semiconductor industry, and TSMC’s advanced production capacity puts it at the center of this transformation. Strong profit margins and expanding production capabilities suggest this isn’t just a temporary boom but a fundamental shift in how the tech world operates. The company’s technology leadership means that whether you’re evaluating when to buy shares or comparing investment options, TSMC consistently emerges as a critical player worth considering.

Learning from Past Investment Decisions

History offers valuable lessons for investors contemplating whether to buy into emerging technology plays. Consider Netflix’s trajectory: investors who purchased shares when The Motley Fool recommended the stock on December 17, 2004 would have seen $1,000 grow to $450,256 by early 2026. Similarly, those who invested $1,000 in Nvidia shares following an April 15, 2005 recommendation would have accumulated $1,171,666. These cases demonstrate that early positions in transformative technology companies can generate extraordinary returns, though success isn’t guaranteed.

The broader investment landscape also provides perspective. The Motley Fool’s Stock Advisor service has delivered an average return of 942% — substantially outpacing the S&P 500’s 196% return over comparable periods. This underscores that identifying the right semiconductor and technology shares to buy can meaningfully impact long-term wealth building.

Evaluating the Investment Case

Before deciding to buy shares in any company, including TSMC, consider the complete picture. The semiconductor sector offers genuine growth catalysts driven by AI adoption, but downside risks persist. Geopolitical tensions affecting Taiwan, cyclical industry dynamics, and valuation considerations all factor into the decision-making process.

As of late January 2026, analysts continue debating TSMC’s valuation and growth prospects. The company’s dominance in chip manufacturing is undeniable, but the question remains whether current valuations reflect these advantages or if better entry points may emerge.

Making Your Investment Decision

The decision to buy semiconductor shares should align with your investment timeline, risk tolerance, and portfolio strategy. While TSMC’s technology leadership and market position are compelling, not every investor should buy at every price point. Consider joining investing communities focused on identifying high-conviction opportunities — resources like The Motley Fool’s Stock Advisor help investors navigate these decisions by analyzing which shares deserve your capital.

Whether TSMC represents the right buy for your portfolio depends on your individual circumstances and investment thesis. What’s clear is that the semiconductor industry’s structural growth story remains intact, and TSMC continues to occupy the best position to capitalize on it.