To The Moon

Buffett has only held TSMC for less than half a year, and it has cleared its positions after a large proportion of positions, which is very abnormal here in Buffett, which is characterized by long-term holdings. So, what caused Buffett to clear TSMC? There is a lot of room for reverie in it.

1. The most important reason should be that the uncertainty is higher than he expected.

We have reason to believe that from the perspective of financial analysis, TSMC must be Buffett's favorite company. The moat is wide enough (with the world's most advanced 3nm process, high market share, and a dual-oligarchy-like monopoly position similar to Samsung), and long profitability time (continuous profitability in the past five years and an average profit growth rate of more than 10%, and up to 20-30% revenue and profit growth in the past three years) The profit margin is high enough (gross profit is between 50-52%, and the net profit is as high as 35%), and this kind of enterprise is rare in the technology industry. In this case, uncertainty beyond Buffett's expectations should come from a non-financial perspective.

2. I don't rule out some aspects that he thinks he hasn't understood yet.

The investment characteristic of Buffett and Munger is that it is incomprehensible and not to invest, and the technology industry has long been Buffett's weakness. It was not until the investment in Apple in recent years that it officially entered the field of science and technology. To be honest, Apple is more like a retail enterprise than a technology enterprise for Buffett, and Buffett loves Apple. Because apples are like Coca-Cola. The logic of TSMC is not like a retail enterprise. After all, TSMC is basically To B.

3. Pressure from Apple cannot be ruled out.

Apple's supply chain management is notoriously cold. He leads the army like a king, but he is unhappy to say that whoever is abandoned will be abandoned. Too many fruit chain suppliers in China have suffered from Apple's losses. TSMC is Apple's top supplier, and Apple is the largest buyer of TSMC's high-end processes. Apple's balance is not to let a supplier have the ability to card its neck, which is as strong as Qualcomm. Therefore, whether Apple also has a hand on TSMC or not, Buffett may know better than others. After all, he He is also a major shareholder of Apple.

The above are all guesses, but they are also based on Buffett's investment style.

Does TSMC, which was abandoned by Buffett, still have investment value?

Personally, I think so. The core reason is that there is no alternative to TSMC in the world, and it will not be available in the short term.

1. TSMC's R&D investment in 2022 was 44 billion US dollars, which brought a process technology that is difficult to catch up, that is, the moat.

This is an investment based on the fact that he already has advanced processes. For those enterprises that have not broken through the 10nm process, I don't know how much more money they need to invest to catch up with TSMC.

2. TSMC's ambition has always been.

In 2022, the R&D investment surpassed Samsung and became the largest semiconductor OEM enterprise. TSMC has known its positioning since the beginning of Zhang Zhongmou's establishment and has been continuously realized. Now it has become more obvious. The world's largest and most technologically advanced semiconductor OEM enterprises deserve it, and there will be no competitors in the short term.

3. TSMC is realizing a global distribution plant and diversifying risks.

Previously, TSMC had 12 factories in Taiwan and one plant in Nanjing. Recently, it has announced that it will open a factory in the United States. Since then, the construction of factories in Japan and Germany has also been put on the agenda. According to TSMC's plan, it will challenge revenue of $100 billion in 2030, more than half of which should be produced in non-Taiwan regions, which will greatly mitigate the risks posed by geopolitics.

Other advantages come together, but in terms of revenue of 100 billion in 2030, as long as it is realized, the market value is expected to be about 3 times that of the current. If you believe that they can achieve it, it is worth holding it all the time.

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