Summary: If you’re considering investing in the technology sector, Taiwan Semiconductor Manufacturing Company (NYSE: TSM) is a name that shouldn’t be overlooked. Since it’s a publicly-traded company, you can buy TSM stock through a regulated online broker, with our go-to option being eToro.
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About TSMC
Taiwan Semiconductor Manufacturing Company Limited (TSMC) is a Taiwanese company that plays a critical role in the global semiconductor industry by manufacturing and selling advanced integrated circuits (ICs) and wafer-based products. Its cutting-edge technology and high-quality products have enabled it to secure partnerships with major tech companies, such as Apple (NASDAQ: AAPL), Nvidia (NASDAQ: NVDA), and Qualcomm (NASDAQ: QCOM).
TSMC IPO
TSMC went public on the Taiwan Stock Exchange (TWSE) in 1994. Later, the company also listed its American Depositary Receipts (ADRs) on the New York Stock Exchange (NYSE) under the ticker symbol TSM. This allows investors from all over the world to invest in the company with ease.
How to buy TSM stock: Step-by-step process
If you’re looking to buy Taiwan Semiconductor Manufacturing stock, you can follow our step-by-step guide below:
Step 1: Research and open a brokerage account
Before diving into the investment process, it’s key to conduct thorough research on TSMC to understand its financial performance, market trends, and industry outlook. Once you’re confident in your decision, you’ll need to open a brokerage account.
For those unaware, a brokerage account is an online platform that allows you to buy, sell, and hold stocks. You should, therefore, choose a reputable brokerage that offers a user-friendly interface and low commission fees.
One such brokerage is eToro. Besides being home to over 30 million investors worldwide, eToro is fully licensed and regulated by reputable authorities. Moreover, it offers a whole range of benefits, such as:
- Commission-free stock trading;
- 2,000+ stocks from 17 exchanges (including TSM);
- Fractional shares;
- User-friendly platform.
Highly Rated Stock Trading & Investing Platform
-
Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.
-
0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
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Copy top-performing traders in real time, automatically.
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eToro USA is registered with FINRA for securities trading.
Step 2: Fund your account
The next step after opening your brokerage account on the desired platform is to fund it with the amount you plan to invest in TSMC. Note that most brokerages offer various funding methods, such as bank transfers, as well as credit cards or debit card payments. However, don’t forget to make sure that you have enough funds available to make your investment.
Step 3: Choose the right ticker and quantity
To identify TSMC’s stock on your trading platform of choice, use its ticker symbol TSM. Once you locate it, click on the stock to view its current price and performance data. Decide on the number of shares you wish to purchase, but keep in mind that you can buy fractions of a share if the price is high and you want to invest a specific amount. As mentioned above, fraction shares are available on eToro, but not on all brokerages.
Step 4: Set the order type
Before you confirm the order, you’ll need to select the appropriate order type for your investment. The two common types are:
- Market order;
- Limit order.
A market order will purchase TSMC stock at the current market price, while a limit order allows you to set a specific price at which you are willing to buy. However, limit orders offer more control over your purchase, but may not be executed immediately if the stock doesn’t reach your specified price.
Step 5: Review and confirm the order
Before finalizing the purchase of TSM stock, you should review the details of your order. By this, we mean checking the number of shares, order type, and total cost. Also, ensure that all the information is accurate and in line with your investment goals. And once you are confident, click that Confirm button and place the order.
Step 6: Monitor your investment
Buying TSM stock isn’t the end of the road. Namely, it’s crucial to actively monitor your new investment. The thing is—staying informed about TSMC’s performance and industry trends is vital in making well-informed decisions regarding your holdings. As such, here are some key aspects to focus on while monitoring your investment:
- Financial reports: Review TSMC’s quarterly and annual financial statements to assess revenue, expenses, profitability, and overall financial health for alignment with your investment goals;
- News and announcements: Stay updated on TSMC’s latest news, such as product launches, partnerships, expansions, or leadership changes, as they can impact the stock’s performance;
- Industry developments: Monitor semiconductor industry trends, technological advancements, and market dynamics to understand TSMC’s business prospects and future growth potential;
- Long-term vs. short-term perspective: Determine your investment horizon and risk tolerance to align your approach with TSMC’s growth potential.
TSM stock price today
Pros and cons of buying TSM stock
Pros
- Market leader: Largest semiconductor foundry with cutting-edge technology;
- Strong financials: Consistent revenue growth and profitability;
- Diverse customers: Broad industry exposure reduces risk;
- Tech innovation: Leading in advanced chip manufacturing;
- High demand: Driven by AI, 5G, and EV growth;
- Dividend yield: Reliable income for investors.
Cons
- Geopolitical risk: Taiwan-China tensions;
- Industry cyclicality: Revenue fluctuations due to market cycles;
- High costs: Significant R&D and capital expenditures;
- Competition: Pressure from Intel (NASDAQ: INTC) and Samsung;
- Supply chain issues: Dependency on critical suppliers;
- Valuation: Premium pricing may deter value investors.
Common mistakes to avoid when buying stock
One of the most common mistakes novice investors make is impulsive investing. It’s, however, key to avoid making investment decisions based solely on emotions or short-term market fluctuations. You should, instead, conduct thorough research and base your decisions on sound financial analysis.
Nevertheless, besides avoiding emotional investing, be sure to avoid:
- Overlooking fees: Keep an eye on transaction fees and commissions charged by your brokerage. Note that high fees can eat into your returns over time;
- Ignoring diversification: Don’t put all your money into a single stock, even if it seems promising. Instead, try to diversify your investment across multiple assets to reduce risk;
- Chasing hot tips: Be cautious of unsolicited stock tips or get-rich-quick schemes. Rely on your research and analysis rather than following rumors.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about how to buy TSM stock
Can I buy TSMC stock if I am not a resident of Taiwan or the United States?
Yes, TSMC’s ADRs are available on the NYSE, making them accessible to international investors.
Is TSMC a good long-term investment?
TSMC’s track record and role as a key player in the semiconductor industry suggest it could be a solid long-term investment.
How often should I check my TSMC stock holdings?
While it’s essential to stay informed, constantly checking your holdings may lead to emotional decisions. Periodic monitoring, such as quarterly reviews, is usually sufficient.
Does TSMC pay dividends?
Yes, TSMC has a consistent history of paying dividends to its shareholders, distributing profits regularly as part of its commitment to returning value to investors.
What are the main risks associated with investing in TSMC?
Investing in TSMC carries risks including exposure to cyclical demand in the semiconductor industry, geopolitical tensions involving Taiwan, and potential impacts from global supply chain disruptions.
Highly Rated Stock Trading & Investing Platform
-
Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.
-
0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
-
Copy top-performing traders in real time, automatically.
-
eToro USA is registered with FINRA for securities trading.
