To The Moon

$Taiwan Semiconductor Manufacturing(TSM)$

TSM is the world's leading foundry in terms of market share (about 55%).  The most advanced semiconductor chips are manufactured there. The latest 3 nanometre technology node chip production will start later this year.

TSM posted Q3 earnings report on 13 Oct. Its revenue rose 36% year over year to $20.23 billion, beating analysts' estimates by $1.14 billion. Its earnings per share grew 66% to $1.79 and topped the consensus forecast by $0.11.

Is everything rosy?

Well not quite, I guess. Semiconductor foundries and even semiconductor equipment manufacturers are upstream in the supply chain. As demand for consumer devices, like PCs, laptops and mobiles drop, it will take time for that demand shortage to affect upstream companies. 

TSM's current revenue was probably secured 6-12 months back and foundry capacity was already booked to supply chips to end user companies like Qualcomm, NVIDIA, AMD, etc... Therefore, any demand destruction from consumer will probably impact TSM 6-12 months down the road, in 2023. 

There was also a report on 13 Oct that TSM was cutting capital spending by 10% this year. This caused ASML's (Dutch semi con equipment maker) share price to drop 9%. This signals cost cutting measures to deal with a drop in revenue.

TSM Share Price

Last Friday's close resulted in a drop in share price to $63. I suspect resistance at $74. If negative sentiment persists, the share price might drop into the $54-59 range where there are a few support levels. 

Overall, if you are interested in investing into an upstream semiconductor company, then TSM is the ultimate leader. It's true that semiconductor is cyclical and we are entering a down cycle, but investing in bear markets is where most gains are made.

@TigerStars@Tiger_chat@MillionaireTiger