USA

Is Taiwan Semiconductor a Better Buy Than Intel for 2026?

semiconductor chip industry Perhaps more than any other, it is a business sector on which the modern world is built. No matter what device you’re reading this on, this wouldn’t be possible without semiconductors.

for a long time, Intel (NASDAQ: INTC) was the undisputed world leader in semiconductor manufacturing, but today this title is Taiwan Semiconductor Manufacturing (NYSE: TSM).

And if you’re looking for a semiconductor investment for 2026, then you should bet on the purebred, not the purebred.

Image source: Getty Images.

The country of Taiwan is the last remnant of China’s pre-communist republican government. It is also where 60% of the world’s semiconductor chips are produced and 90% of the most advanced chips come from.

Most of these chips are manufactured by Taiwan Semiconductor Manufacturing, better known as TSMC. The financial situation of the company also confirms this. TSMC generated $121.3 billion in revenue in 2025, an increase of 37% compared to 2024. Over the last three years, its revenue has grown at a compound annual growth rate (CAGR) of 20.48%. It also routinely beats earnings expectations and is incredibly profitable, with a 58.98% gross margin and a 43.29% net income margin.

Also note that TSMC pays a dividend that yields 0.99% at current prices; This is quite impressive considering the share price is up 66% in the last 12 months. The company has also increased its dividend by 12.3% annually over the past five years. Compare this to Intel and it becomes pretty clear that TSMC is unlikely to give up its throne anytime soon.

Despite the heavy blow from the US government, Intel’s revenue has fallen by an average of 8.4% over the past three years. Gross profit margin is only 33%, while net income margin is a razor-thin 0.37%. This means that in terms of net income, Intel is only marginally profitable. It’s also worth noting that Intel has suspended its dividend until late 2024 and plans to start paying it again soon.

Intel’s trailing 12-month (TTM) revenue is less than half of TSMC’s, its TTM diluted earnings per share (EPS) is just $0.05 versus TSMC’s $1.99, and TSMC has nearly three times as much cash as Intel, between $90.25 billion and $30.94 billion.

This is despite it also having less debt than Intel. TSMC owes only $33.76 billion to Intel’s $46.55 billion. So TSMC has a positive net cash position of $56.49 billion and Intel has a gap of $15 billion.

Also consider that TSMC is building factories in America, Intel’s home country. It has a huge $165 billion factory in Arizona and new ones are coming. New York Times Last week, it was reported that TSMC had purchased a second land in Arizona and aims to expand its production footprint in America.

I think it’s generally a good idea to bet on the horse that looks the strongest in the race, and TSMC is pretty thoroughbred compared to its rivals. If you make just one semiconductor investment in 2026, TSMC presents a compelling case.

Before buying stock in Taiwan Semiconductor Manufacturing, consider:

Motley Fool Stock Advisor The analyst team just determined what they believe to be Top 10 stocks for investors to buy now… and Taiwan Semiconductor Manufacturing wasn’t one of them. The 10 stocks that made the cut could deliver monster returns in the coming years.

Think about when netflix You made this list on December 17, 2004… if you invested $1,000 on the date we recommended, You would have $474,578!* Or when Nvidia You made this list on April 15, 2005… if you invested $1,000 on the date we recommended, You would have $1,141,628!*

Now it is worth noting that Stock Advisor total average return 955% — a market-beating performance compared to the S&P 500’s 196%. Don’t miss the latest top 10 list available Stock Advisorand join an investment community created by individual investors, for individual investors.

See the 10 stocks »

*Stock Advisor returns as of January 19, 2026.

James Gets Hired It has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel and Taiwan Semiconductor Manufacturing. The Motley Fool has a feature disclosure policy.

Is Taiwan Semiconductor a Better Buy Than Intel for 2026? originally published by The Motley Fool