TSMC: Dominance and Risk

Heartbeat12
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.

TSM Enters $1Trln Club: Does the Foundry Has Potential to Double Again?
TSM's net profit rise to T$325.3 billion ($10.11 billion), beating the estimate of T$300.2 billion. Prompted by the stellar earnings, TSMC entered $1trln market club and hit $212. So far, the stock nearly doubled in 2024. -------------- Will the foundry giant has potential to double again? Will you take profit or chase high?
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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