Forget Taiwan Semiconductor: 2 AI Semiconductor Equipment Stocks to Buy and Hold Instead

Taiwan Semiconductor's success would not be possible without ASML's vital EUV machines.

Equipment from Applied Materials handles critical processes in semiconductor development.

Many investors argue that Taiwan Semiconductor Manufacturing (TSMC) is the most crucial chip company. Given that it manufactures the chips designed by Nvidia , Broadcom , and other chip giants, the industry would collapse without it.

Unfortunately, TSMC built most of its fabs in Taiwan, a geopolitical hotspot. While an invasion of Taiwan is unlikely, investors have to account for the possibility of such an event, one that could cost the company most of its production capacity.

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Knowing that, investors may want to look to the equipment makers, and these two semiconductor stocks could drive returns.

ASML Holding (NASDAQ: ASML) is the only company that makes the extreme ultraviolet lithography (EUV) machines that help produce TSMC's most advanced chips. So the industry needs ASML to advance, and with it based in the Netherlands, it doesn't face the same geopolitical dangers as TSMC.

The projected compound annual growth rate (CAGR) of the AI sector is 29% through 2030, according to Grand View Research. This implies that ASML's equipment is becoming more valuable than ever . Since 29% of the company's revenue in the first half of 2026 came from maintaining those machines, the company should continue to earn some recurring revenue.