TSMC: Dominance and Risk

Heartbeat12
2024-10-09

$Taiwan Semiconductor Manufacturing(TSM)$ TSM has 90% of market share in advanced chips and the barrier to entry is extremely high. This is a buy and hold forever stock. They pretty much have no competition.

Samsung is a way distant 2nd. Global Foundries is a loser. Intel $Intel(INTC)$ is trying to make a play but they’ll need a decade of flawless execution to gain share (spinning off IFS, massive investments, customers willing to take a leap of faith, and honing their fab process with the disadvantages of U.S. labour). Realistically no one can challenge them.

In addition, TSMC is slowly hedging by opening new factories around the world. The most legitimate observation about the politic risk is it will always cause the stock to trade at a lower PE multiple than what it would if the risk did not exist. One negative story by Bloomberg in the summer caused TSMC to sell off even though its fundamentals did not change. Owning this stock is not for the faint of heart.

TSMC Earnings Beat! Will the Giant Save the Semi Trend?
TSMC posted a net profit of T$374.68 billion ($11.4 billion) for the quarter ended Dec. 31, a record high for any quarter. That was in line with the T$377.95 billion LSEG SmartEstimate drawn from 22 analysts. SmartEstimates give greater weighting to forecasts from analysts who are more consistently accurate. Semiconductor shares gained in overnight trading with TSMC shares jumping 6%, Nvidia up 2%, ASML up 3%. ----------------- Will TSM earnings' beat save the semiconductor stock prices? Another all time high this week? What's your target price for TSM?
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