TL;DR:
The US-China trade war is turning into a tech war. Given the Huawei saga, US semiconductors are not supplying chips to Huawei, but Taiwan's TSMC is continuing to supply them. In fact, TSMC announced their mass production of its second-generation 7nm+ process for Kirin 985 and or A13 chipsets. What does this mean for TSMC?
Business overview
Taiwan Semiconductor Manufacturing Company Limited (TSMC) is a leader in the foundry segment of the global semiconductor industry. In 2018 they gained an estimated market share of 56%, despite intense competition from both established players and relatively new entrants to the business. TSMC offers the foundry segmentâs broadest technology portfolio and continues to invest in advanced and specialty technologies to provide customers more added value. This is a differentiating competitive advantage for TSMC.
Financials
Increase in revenue and profits. Earnings per share increased from NT 13.54 cents in 2018 compared to 13.23 a year before. But I guess now what we are more concerned with is the current situation.
Share Price
From this chart, the share price just kept declining after the peak at the end of April. The current share price is NT229.50 and USD37.69 per share respectively (as of 30 May 2019).
- Huawei accounts for a high percentage of TSMCâs revenue. Apple as well. Both are among the top five customers of TSMC.
- If sales of Huawei and Apple drops, the performance of TSMC in the near future will decline.
But if we scale the chart and look at just the 1-day view...
The share price is going up.
What we know
- Semiconductor sales for this year is going to underperform overall. However, sales will increase in 2020.
- Problem is that even though they are continuing to supply to Huawei, Huaweiâs phone sales will plunge (at least this year), and this can put a hole in TSMCâs revenue
- Many analysts are recommending a buy given that the share price dipped so much recently. Why?
- TSM Companyâs fundamentals are very solid.
1. Technology Leadership
In 2018 TSMC continued to invest in research and development, with total R&D expenditures amounting to 8% of revenue, a level that equals or exceeds the R&D investment of many other leading high-tech companies.
2. Intellectual property
A strong portfolio of intellectual property rights strengthens TSMCâs technology leadership and protects their advanced and leading-edge technologies. As of the end of 2018, TSMC has accumulated near 50,000 patent applications, and over 34,000 patent grants worldwide.
3. Quality and reliability
With advanced technology and good growth prospects. Although there are many semiconductor players in the market, TSMC is a global leader. Investing even more into R&D will give them continuing edge.
Conclusion
As you can see from the 1-day view today, the share price is on the rise. Given that TSMC is a leader in the semiconductor industry, many are taking the opportunity to buy the shares now. Do give your thoughts below if youâre buying or have bought TSMCâs shares!
TL;DR:
The US-China trade war is turning into a tech war. Given the Huawei saga, US semiconductors are not supplying chips to Huawei, but Taiwan's TSMC is continuing to supply them. In fact, TSMC announced their mass production of its second-generation 7nm+ process for Kirin 985 and or A13 chipsets. What does this mean for TSMC?
Business overview
Taiwan Semiconductor Manufacturing Company Limited (TSMC) is a leader in the foundry segment of the global semiconductor industry. In 2018 they gained an estimated market share of 56%, despite intense competition from both established players and relatively new entrants to the business. TSMC offers the foundry segmentâs broadest technology portfolio and continues to invest in advanced and specialty technologies to provide customers more added value. This is a differentiating competitive advantage for TSMC.
Financials
Increase in revenue and profits. Earnings per share increased from NT 13.54 cents in 2018 compared to 13.23 a year before. But I guess now what we are more concerned with is the current situation.
Share Price
From this chart, the share price just kept declining after the peak at the end of April. The current share price is NT229.50 and USD37.69 per share respectively (as of 30 May 2019).
But if we scale the chart and look at just the 1-day view...
The share price is going up.
What we know
1. Technology Leadership
In 2018 TSMC continued to invest in research and development, with total R&D expenditures amounting to 8% of revenue, a level that equals or exceeds the R&D investment of many other leading high-tech companies.
2. Intellectual property
A strong portfolio of intellectual property rights strengthens TSMCâs technology leadership and protects their advanced and leading-edge technologies. As of the end of 2018, TSMC has accumulated near 50,000 patent applications, and over 34,000 patent grants worldwide.
3. Quality and reliability
With advanced technology and good growth prospects. Although there are many semiconductor players in the market, TSMC is a global leader. Investing even more into R&D will give them continuing edge.
Conclusion
As you can see from the 1-day view today, the share price is on the rise. Given that TSMC is a leader in the semiconductor industry, many are taking the opportunity to buy the shares now. Do give your thoughts below if youâre buying or have bought TSMCâs shares!