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Taiwan Semiconductor Manufacturing (TSM -1.35%), the world’s largest chip maker, was a big investment last year. Bears said that in a pandemic market, the decline in PC sales, the mobile phone supply chain and other macroeconomic obstacles could hinder the growth of the semiconductor industry and reduce the market demand for the service.
Bulls said that TSMC has experienced several cyclical declines and will catch up with its closest competitors Samsung and Intel in the “processing race” to produce smaller and denser chips.
Tsmc Stock Photos
However, TSMC stock is down more than 30% this year, indicating that most investors are still bearish. Let’s see if two recent events – green and red flags for the future of this Taiwanese technology giant – can change that balance.
Last month, Warren Buffett’s Berkshire Hathaway (BRK.A -0.32%) (BRK.B 0.04%) announced a $4.1 billion stake in TSMC. That makes chipmaker Berkshire the ninth largest shareholder at 1.4% of the portfolio.
Buffett has never spoken publicly about his investments, but Berkshire has bought quite a few tech stocks throughout its history. Apple (AAPL -1.60%) is the largest shareholder, accounting for 39.2% of its portfolio, while other prominent tech players include Activision Blizzard (1.3%), HP (1%) and Amazon ( 0.3%). . and Snow (0.3%). Speaking at a recent conference in Taipei, TSMC CEO Mark Liu praised Buffett for his “eye” for good investments.
Buffett favors long-term growth and companies that don’t have a lot of space. TSMC ticks all three boxes: its stock trades at just 13x earnings, has grown at a compound annual growth rate (CAGR) of 17% from 2011 to 2021, and remains a manufacturer smallest and strongest in the world. chips.
Warren Buffett’s Berkshire Hathaway Cut Its Holding Of Tsmc Stock By 86% Last Quarter
TSMC’s largest customer accounted for 26% of its revenue in 2021. TSMC did not name the customer in its latest annual report, but it is believed to be Apple. As such, the Mac maker’s recent troubles in China could pose a significant obstacle to TSMC’s short-term growth.
Violent protests broke out at China’s largest iPhone factory last month in response to strict COVID-19 measures and unpaid bonuses. The outage is said to have cut more than 30% of output in November, which could limit Apple’s iPhone supply during the holiday season.
But that’s not all. Other protests have erupted in China in response to the government’s “zero-COVID” policy, and the civil unrest could affect trade in the Greater China region, which accounts for 19% of Apple’s revenue in 2022. in September). This could affect TSMC.
Berkshire’s big acquisition shows that TSMC is still a solid investment for long-term investors. However, over-reliance on Apple could turn out to be a liability in the short term due to recent difficulties in China.
Tsmc’s $35 Billion Rally Puts Taiwan Stock Index Above 1990 Peak
I don’t think any of the headlines of the scale are in favor of the bulls or the bears. Specifically, TSMC’s stock will remain neutral for the next third of the month as investors continue to worry about the slowdown in the PC market, Apple’s supply woes and the Biden administration’s ban on chip sales in China.
But in the longer term, I believe that TSMC will grow as Samsung and Intel abandon their expensive plans to compete in the technology race. TSMC continues to spend $36 billion in capital expenditures this year to boost advanced integrated circuit production, compared to Intel’s $21 billion and Samsung’s $37 billion in total semiconductor and display spending.
So if you’re looking for short-term returns, TSMC could be a boring investment. But if you plan to follow Buffett’s mantra of buying quality stocks and holding them “forever,” TSMC is still a long-term buy.
John McKee, CEO of Amazon Whole Foods Market, is a member of Motley’s board of directors. Le Sun has held positions in Amazon.com and Apple. Motley is supported by Activision Blizzard, Amazon.com, Apple, Berkshire Hathaway, HP, Intel, Snowflake and Taiwan Semiconductor Manufacturing. Motley recommends the following options: Berkshire Hathaway $200 in January 2023, $57.50 in January 2023, Intel 45 calls in January 2025, Apple through March 2023 $120 short January 2023 $200 short January 2023 Berkshire Hathaway $265 short January 2023 Berkshire Hathaway $2023 January 2023 Apple CALL Motley Fool has a disclosure policy.
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Warren Buffett’s 1 share is down 90%, and if you bought in the fall, you will see that 1 share will be bought in April and April 1st. 45% growth reduction
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Taiwan Semiconductor Manufacturing Company ( TSMC ) NYSE: TSM , TPE: A recent rally of 2330 added $410 billion to $72 billion in company revenue – pushing it higher than Visa NYSE: V and Berkshire Hathaway NYSE: BRK.A more.
Taiwan Stocks Down More Than 4% In Mixed Asia Trade As Tsmc Plunges 8%
Enter! TSMC’s market capitalization has exceeded $400 billion. 10 Greatest Stocks in the World Today — Tim Culpan (@tculpan) July 28, 2020
The story behind Omar Sohail’s Apple M3 for MacBook Air is that the upcoming iPad Pro model will reportedly be mass produced using TSMC’s next N3E process.
US-listed ADR shares rose 12.65% to $83.25 in US trading, while TSMC hit NTD 466.5 in the first 10 minutes of trading in Taipei. Because TAIEX has a stop that stops trading after the stock rises or loses 10% for the day, trading was stopped and the stock was withdrawn from tomorrow’s session.
The market index reached a high of 13,000 because of the weight of TSMC in TAIEX, which accounts for 25% of the exchange. TAIEX ended 2019 as the best market in the world, and with its recent gains, TSMC exceeded its February 1990 peak of 12,495.
Taiwan Semiconductor: Fairly Valued Leading Chip Stock Now (nyse:tsm)
Singles Microelectronics TPE:2303 , a Taiwan-only manufacturing company and one of TSMC’s smaller rivals, also gained 10% in afternoon trade in Taipei, hitting a 12-year high on a 23-year NTD.
TSMC rally saw Intel (NASDAQ: INTC ) “minimum wage” and 7nm process button delays – critical to AMD’s ability to stay competitive with AMD (NASDAQ: AMD ) – analysts almost down around the world. Intel has already started placing orders with TSMC to supply the skills needed for its business.
According to a report by the Taipei-based China Times, Intel has already entered into an agreement with TSMC to increase its capacity. The report also suggests that AMD (NASDAQ: AMD ) will become TSMC’s largest 7nm customer next year, with a reported 200,000 wafer orders that Apple (NASDAQ: APPL ) is moving to 5 nm. Additionally, it is said that AMD and Intel are competing with all their abilities due to the termination of TSMC’s contract with Huawei. .
Berkshire Hathaway Inc., owned by Buffett, reduced the income of US TSMC shares by 86% in the last quarter. Considering that they were sold at an average price during this period, the sale of shares generated $3.7 billion.
Taiwan Chipmaker Tsmc Revenues Hit Record High In 2020; Stocks Follow
Shares in the world’s largest chip maker fell as much as 4% in Taipei after the news, amid heavy market losses. TSMC announced in November that it had bought $5 billion of Buffett’s stock, up 40% from October’s low.
“It is surprising that Berkshire reduced its stake to only one quarter, which is different from its past experience of long-term investment and stock addition,” said Tony Huang, vice president of Taishin Securities Investment Advisory.
The chip industry has been forced to contend with declining demand for electronics in China due to supply cuts caused by Covid and rising costs. TSMC is down about 10% to $36 billion in 2022 after the Biden administration imposed new restrictions on Chinese access.
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