How to buy Taiwan Semiconductor shares (TSMC)

By:

Charlie Hancox

Charlie is a Financial Writer for Invezz. He covers commodities, cryptocurrencies, and breaking news. Prior to joining Invezz he helped grow Crux Investor into the fastest-growing... read more.

Updated: Jul 6, 2023

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This page explains everything you need to know before you invest in Taiwan Semiconductor stock. We provide a step-by-step guide that will help you buy Taiwan Semiconductor stock quickly and easily, explore the history of the company and look towards the future. Read on to get started.

Compare the best TSMC trading platforms

Click on any of the links below to get shares from a reliable platform immediately – they are the best places to buy Taiwan Semiconductor shares right now. However, if you aren’t ready to pull the trigger just yet, read on to keep learning about the company.

How to buy TSMC stock, a step-by-step guide

The process of buying shares is simple, so don’t worry if you’re new to the process. These are the steps to follow in order to complete your investment:

1. Choose a broker. In order to buy stock, you will need to use an online brokerage platform. There are many different options to choose from, each with its own unique benefits and drawbacks. The comparison table above can help you select the right broker for you, and you can head to our comprehensive broker reviews if you’re still unsure.
2. Create an account. Once you’ve selected your broker, simply go to their website and create an account. The steps required for this will vary from platform to platform, but generally, you can expect to have to provide your name, email address, phone number, and some form of photo identification.
3. Deposit funds. Log into your broker account and select the option to deposit funds. Depending on your broker you’ll have a variety of payment options available; most brokers accept bank transfers and debit card payments, but not all accept e-wallets such as PayPal. Select your preferred payment method and deposit the amount of money you wish to invest, be that £1, £250 or £1,000.
4. Place an order for TSMC stock. Now navigate to the broker’s buying stocks page (a link to this can be found in the menu on the website). Here you’ll be able to search for TSMC’s ticker symbol (TSMC) and see the current price at which the stock is trading. If you’re happy with the price, enter the number of shares you wish to buy and place your order.
5. Execute your order. Once you have placed your order, your broker will automatically execute it for you and your shares will be listed in your account. Congratulations, you’ve just bought shares in TSMC!

Should I invest in TSMC?

If you believe Taiwan Semiconductor Manufacturing Company will play an important role as the repercussions of the COVID-19 pandemic on the global semiconductor market continue to be felt, it could be a good company to invest in.

Semiconductors are primarily used in electronic devices, including chips, diodes, transistors, and integrated circuits. Essentially, anything that uses radio waves or is computerised depends on semiconductors. However, COVID-19 has created a huge supply shortfall of these chips, resulting in protracted lead times for automobile and tech manufacturers.

Founded in 1987 and headquartered in Taiwan, TSMC is the world leader in semiconductor manufacturing, making it a crucial cog in this restarting industry. Over the course of the last few years, TSMC has overtaken its US rival, Intel, to ascend to the top of the semiconductor food chain. Even after the pandemic has caused financial damage for numerous companies, TSMC has continued to hold a 50 per cent market share of the global pure wafer foundry market.

How has the company performed in recent years?

As previously referenced, rather well. The company’s production has consistently risen until it has reached the top. As a result, Taiwan Semiconductor’s share price has followed a similar trajectory, climbing around 300% in the last five years.

Since the turn of the decade, the company’s revenue from production has constantly increased year on year, and it now sits at around $13 billion annually. This has allowed the company to pay out a dividend yield of well over 1%, which when combined with this stock’s growth credentials makes it an intriguing investment proposition.

A significant portion of the world’s semiconductor production remains offline, and with around 55,000 employees ready to ramp things up to maximum capacity, TSMC could be poised to plug the gap, generating more revenue and more share price appreciation.

Is it a good time to buy TSMC shares now?

It really depends on what you are looking for from your investment. If you want to get in now and hold TSMC shares until they rise substantially in value in the future, you need to carry out fundamental analysis and work out the company’s true value. Once you have done this, you can compare it to the going market rate and decide if now is a good time to pull the trigger. With even more growth on the cards, it seems now could be a good time to invest for the long term.

By contrast, if you are a stock trader then you won’t be holding shares for long enough to benefit from stock price accretion. However, with new variants continuing to crop up around the globe, the short-term future of semiconductor shortage remains uncertain. This creates volatility, and this provides good opportunities for you to trade effectively if you can get your technical analysis right.

Make sure you check out the articles below to learn from the latest analysis that our experts have conducted on Taiwan Semiconductor. This will help bolster your knowledge and get you one step closer to making a clear decision, one way or the other.

Buying, selling and trading shares for beginners

What to do before buying shares

You should always take the time to research a stock fully before investing your money, especially if you haven’t bought shares before. The more knowledge you have, the better your chances of making a wise investment. 

With that in mind, here’s a checklist to run through before investing in shares.

1. Research the company. You should always examine the fundamentals of a company before buying its stock. What is TSMC? How did the company get its start? How did it grow? Is its revenue and profit growth picking up? Is the company innovating? The more you know about the company, the better positioned you’ll be to make smart investment decisions.
2. Make sure you understand the basics of stock investing. Before getting involved in the stock market, make sure you have an understanding of how it works. This will ensure that you have more clearly defined goals and have thought through how you will achieve them.
3. Decide between share dealing and CFD trading. Choose the type of investment strategy you want to pursue, and make sure you have carried out the necessary fundamental or technical analysis for share dealing and CFD trading respectively.
4. Set the size of your budget. The golden rule of investing is never to risk more than you can afford to lose. Not every investment you make will result in a profit, so it is important to set a budget that not only allows a good potential for capital growth but also protects against overly damaging losses.
5. Find the right broker. Individual brokers each have their own pros and cons. Some will have low fees but have a user interface you struggle to understand, whereas others may be a bit more expensive but come with a range of features that you want to take advantage of. Our broker reviews can help you find the right platform for you.
6. Examine broader market conditions. No stock exists in a vacuum, and it’s always important to analyse the general trends of the stock market as a whole before investing. If a bear market is setting in and stock prices are falling, it’s best to wait it out and invest your money later when the stock is cheaper. If, however, the market is looking bearish, you’ll want to make your investment quickly to get the maximum benefit from rising stock prices. Our news can help you keep on top of movements in the financial markets.

What is the difference between buying, selling, and trading shares?

If you’re new to stock investing, then it’s important to understand the basics of how to buy, sell, and trade shares. Here’s a quick run-through of what’s involved in each.

Buying TSMC

This process involves finding a broker and placing an order to buy shares in TSMC, as outlined in the steps further up this page. Ideally, you want to time your investment when the stock’s price is low so that you can profit by selling the shares after they increase in value.

Selling TSMC

When you sell any shares you have bought, you’ll want to do so at a higher price than the one at which you bought to earn a profit. 

When you sell is up to you. You might decide to hold for the long term, hoping to benefit from the company growing steadily throughout. Or, if you see that the company’s stock is already up a lot compared to the price you bought it and you’ve noticed that the stock market is starting to fall, it might make sense to sell and take your profits to invest elsewhere. Equally, if the stock has fallen since you bought it and looks set to fall further, it might be a good idea to cut your losses by selling your shares.

Trading TSMC

Trading is the same process as buying and selling shares, it’s just done over shorter periods of time with the aim to make small profits on a regular basis. This means that you can make money faster and spend your profits in your day-to-day life – however, on the other side it means you can lose money faster as well. For inexperienced investors, we generally recommend making investments for at least 6 months to a year instead of making trades in quick succession.

You can trade shares through buying and selling shares, or by trading with CFDs. These allow investors to speculate on stock prices and trade with leverage in pursuit of bigger gains. CFDs trading is explained further in the next section, but it is worth noting that beginners should avoid trading with leverage. It comes with large risks and is best left to experienced investors.

Ways to buy TSMC shares

When it comes to investing in any stock, the two options you have are share dealing and trading. Which one of these methods to opt for largely depends on your investment timeline, with investors thinking long term tending to go for share dealing, and those looking for short term gains pursuing a more aggressive trading strategy.

Here’s a quick summary of the two approaches, and the pros and cons of each.

Share dealing 

Share dealing refers to the practice of buying and holding shares in a particular company over the long term. When investing like this, you’re seeking to profit either from dividend payments or an increase in the stock’s price over time.

When investing your money this way, it is important to do a thorough fundamental analysis of the company in which you are investing. You want to put your money in a stock you believe will trend upwards over time, even if there is some market volatility along the way, rather than get distracted by shorter-term peaks and troughs.

Pros

• Can build wealth over time to achieve financial goals
• Don’t need to be very reactive to short-term market movements
• Some stocks will give you an income through regular dividend payments

Cons

• Takes a long time to realise any profits
• Your capital is tied up in stocks and cannot be used for other investments

CFD Trading 

If your aim is to generate profits in the short term, then you might be better off trading shares than holding them in your portfolio. Stock trades like this are executed using CFDs (contracts for difference), which allow investors to trade against the value of a stock without having to take ownership of it. When CFD trading, investors are looking to buy and sell stocks fast to profit from short-term fluctuations in value.

One aspect of CFD trading that many investors find attractive is that they allow you to trade with leverage. This means you can place large trades while only putting up a fraction of the value yourself – for instance, if a platform offered leverage of 1:10, you could put £10 into shares and be able to trade £100 worth. This can maximise profits if the market moves in your favour, but be careful as it can also lead to heavy losses.

When trading using CFDs, it is key to be skilled at technical analysis and reading stock price charts. As you’re trading stocks quickly and frequently, the fundamental strength of the company in which you’re investing isn’t as important as being able to predict how its stock price will rise and fall minute-by-minute.

Pros

• Can generate fast profits if you read the market right 
• Some platforms allow you to trade with leverage
• Prevents your capital being tied up so you can take advantage of investment opportunities

Cons

• Trading with leverage is risky and can lead to big losses
• Doesn’t necessarily generate growth over the long term

Consider which approach suits you best and craft an investment strategy that works for you. If you need more information, then simply take our stock trading course and read our guide to CFD trading to get you up to speed. 

If neither of these options appeal to you, then you can find a variety of other ways to invest on this page. However, if you are ready to get involved now, simply select one of the brokers in the table above and get started. 

How to choose a broker

With the wide variety of online brokers available these days, it can be hard to figure out which is the best service to go with. Our comparison table and in-depth reviews can help you cut through the noise, but by and large these are the aspects you should be considering when selecting a broker:

• Range of stocks available. The most important thing is that you can actually use the broker to buy the shares you’re looking for. Some brokers offer more stocks than others, and many will allow you to trade other assets, such as forex and commodities.
• Fees and commissions. You want to keep as large a chunk of your profits as you can, so it’s important to make sure your broker doesn’t charge high fees that can eat into your profits.
• Regulation. You should only use regulated brokers to place trades and buy TSMC shares in the UK. Unregulated brokers can be risky and offer little to no protection if the business were to fail while you had funds in your account.
• Payment methods available. You might want to buy stock in TSMC using a specific payment method, such as PayPal. Not all brokers accept every payment method but using our comparisons you can search only the brokers that support the option you’re looking for.
• Reputation. One of the strongest indicators of a broker’s reliability is the reputation it has with the customers who have used it. Brokers are online businesses, and as such many user experiences can be found online. You can check these out in addition to our reviews to make sure you choose the right platform.
• Customer service. As you’re going to be investing your money using the platform, you want to check that the broker offers good customer service in case you have a query or something goes wrong.