valued the global semiconductor market at $600 billion in 2021. The same report predicts annual growth of 6% to 8% for the next several years. At that rate, the industry will reach $1 trillion by 2030.
TSM's annual cash dividend of $1.8216 per share equates to a yield of 2.1 %. NVDA also pays a dividend, but it's miniscule related to TSM. NVDA's $0.16 annual payout yields 0.07%.reports TSM's five-year average price to earnings ratio at 23.1x. Price to earnings, also known as the earnings multiple or P/E ratio, tells you what you pay to invest in $1 of the company's earnings. TSM's current P/E is well below its five-year average of 13.7.
NVDA’s most recent earnings release for its fourth quarter of fiscal year 2023 showed a quarterly revenue decline of 21% and a GAAP EPS dip of 52%. Full-year fiscal 2023 revenues were in line with the prior year, but GAAP EPS dropped 55%. Non-GAAP EPS fell 25%. The company did repurchase $1.15 billion of its shares in its last fiscal year.
No matter whose research report you read, the outlook for semiconductors is strong. Global demand for smarter, faster electronics and computing power will drive demand for semiconductors for the foreseeable future. In recent years, semiconductor players have faced headwinds from supply chain disruptions, rising commodity costs and cyclical demand.Both TSM and NVDA offer exposure to AI by way of their chipmaking activities. The quality of that exposure, however, is quite different. TSM is a safer bet, while NVDA is more speculative.
Both for complementary reasons!