Like cherry petals
our chips storm out by millions;
Mister Market sleeps.
-- Anders Bylund, 2010
The global economy gently roars back to health, like an injured lion cub. Once-reticent businesses once again spend on improving their IT environments. Meanwhile, trendy gadgets like smartphones and tablet computers are flooding the market. All told, the microchip makers can hardly keep up with demand.
So it's hardly surprising to see Taiwan Semiconductor Manufacturing (TSMC)
Since TSMC is the world's largest chip-manufacturing outfit, industrywide shortages represent a huge growth opportunity for the company. A new and absolutely enormous factory will soon expand TSMC's capacity very significantly, and a recent legal settlement with smaller rival Semiconductor Manufacturing International
These initiatives should keep the distance between TSMC and small rival foundry United Microelectronics
The only surprising part of TSMC's brisk success is why the stock hasn't followed suit. Despite 36.6% net margins -- in the notoriously low-margin hardware manufacturing business, no less -- and hefty growth assured for the foreseeable future, this stock has underperformed the S&P 500 benchmark over the past year, and it's down again today after this stellar report.
Do me a favor, will you? I just entered a thumbs-up rating on TSMC in Motley Fool CAPS. It's a five-star stock already, but you can help to make sure this badge of market-beating honor stays in place by following my example right now. It's the least we can do for a very deserving stock.
Fool contributor Anders Bylund owns shares in TSMC and AMD, but he holds no other position in any of the companies discussed here. He is an All-Star CAPS player with a zest for National Poetry Month. NVIDIA is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletter services free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.