Taiwan Semi Is an Attractive Stock But Poses Some Risk

TaiwanSemiconductor's (TSM) impressive second-quarter revenue growth, combined with its recently reported decision to build three new packaging plants and reports that it has been capacity constrained, indicate that the firm continues to be a huge beneficiary of the AI boom. Additionally, the company is highly unlikely to be hurt by competition in the foreseeable future, and its valuation is attractive.

On the downside, there is a possibility of China invading Taiwan, where most of TSM's factories and much of its advanced chip production are located, within a few years. Therefore, long-term, risk-averse investors may want to consider avoiding the name.