TSMC STOCK ANALYSIS – Keep in mind the cyclicality!



TSM stock has been an amazing compounder over the years and it is actually more than a 100 bagger.
The reason for such an amazing stock performance are the good growing market, high returns on equity, a strong balance sheet that makes you survive the cycles, organic growth that is possible thanks to a profitable operation.

0:00 TSM stock price look
1:03 TSMC business overview
3:49 Fundamentals
5:33 TSM stock valuations
8:10 TSMC vs Intel

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48 thoughts on “TSMC STOCK ANALYSIS – Keep in mind the cyclicality!”

  1. WARNING: As the channel grows (thank you all for that), there are more and more scammers impersonating me. The only thing I am selling is my Research Platform and Book https://sven-carlin-research-platform.teachable.com/p/stock-market-research-platform

    All that I do, the real links to my content are in the description of the video, I don't give out my Whatsapp number and I don't sell any Cryptocurrency related things! BE CAREFUL OUT THERE!

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  2. I don't like either of them. I don't like this industry, even though it is impossible for it not to keep growing. A small difference in efficiency becomes a huge difference in competitivity. This is happening to Intel because TSMC achieved a breakthrough that made their current generation chips simply better than Intel. If Intel doesn't close the gap in 2 years, they will die. However, if Intel makes the next breakthrough, then tables can be turned. I don't like this. Same reason I decided not to invest in the solar panel manufacturers. The interesting emerging market stock to look at there would be Jinko Solar.

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  3. Sven, you are one of the very few that think as an investor, and I always enjoy and appreciate what you have to say.
    It is a pity, that you analyze numbers as you should, but you miss something huge in your analysis, which is not just a shot term shock.
    It is about transistor density. It is the first time in history that Intel stays significantly behind, and the economics of this fact are massive.
    For understanding the seriousness of the situation, Intel was considering retreating and go fabless. Finally it won't, but things are very critical. (defending x86 will also become difficult if they can't make more efficient chips)
    Since, you have invested in Intel please focus in this factor which is maybe 80% of the whole story.
    Intel's problem is not AMD. AMD, Apple silicon, ARM (for example Amazon Graviton, Windows ARM) is just a consequence of TSMC's becoming the leader in density.

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  4. This may sound crazy, but rather than chasing 5G and tech stocks at 40, 50, 60 PE’s and up, why not buy the supply chain?

    Better to have a fairly valued AMAT at 25, TSM at 37, and INTC at 11 with their moats than APPL, Microsoft, et al overvalued at 35+ PE ratios…

    Or…lol…Tesla at 1655…

    Especially if tech becomes the epicenter of the Bubble when it bursts…

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  5. Sven, please look into Beyond Meat. Its the leader in the plant based food industry and I think it has enormous growth potential with good earnings to justify its price.

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  6. 1.Great work! I have a question though. Why do you value the company with dividends instead of earnings? If we value growth stocks with dividend, all growth companies are worth nothing.
    2. The greatest moat of TSMC is not in the numbers though. It's culture and ethics. Tech lead is of course the strongest trait but the culture is a big part.
    The major competitor is Samsung, which has a 18%-20% second largest market share. It has server ethics problems. It competes with its customers, stole Apple's design (and got caught) and screwed up Qualcomm latest processor with their half-assed 5nm chips that overheat. Any company doing business with Samsung will learn this the hard way. One of the major pillars created by TSMC founder Morris Chang is "we don't compete with customers. We serve." The US has reached agreement with TSMC to extend operation to US, mainly producing chips for the US military. Japan just followed with similar requests. And now Germany car industry asking for help with chips for cars.
    My only concern is the company's capacity to fill all this insane need. That's why cap ex next year is through the roof. Another thing about company culture. TSMC has the habit of downplaying expected growth rate. It's also part of the old school Chinese mindset "Talk less, do more."
    3. Intel's 7nm has the same transistor density as TSMC's 5nm. It's the same level product. The problem is timing. Intel will start mass produce 7nm in 2023-2024, by then it will be a 3nm market. Intel is around one generation behind in tech, which, in semiconudctor field, is very hard to catch up, if not impossible. TSMC will begin mass produce 3nm next year and already secured major breakthrough in 2nm. Apple has already booked up all the 3nm capacity. The waiting list extends to 2024.

    By the way, try Apple's M1 chip made with TSMC 5nm tech. You will be surprised by its performance and not surprised as to why Apple chose TSMC. As for Qualcomm's Snapdragon 888 made by Samsung 5nm, it's already fxxked and Qualcomm is now cleaning up the mess with a "new" Snapdragon 870, made by, of course, TSMC 7nm.

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  7. Sven, great video! Maybe you can consider research Transener (Tran), an argentinian stock. It hasn't ADR, only it's controller Pampa has. For me is a bargain, of course our economy is a disaster but for long perspective would be a buy at the actual price, good numbers low P/E.

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  8. This was the 1st company I analyzed myself when I started watching your videos and learning from you, so it will always be special for me. Got in at $76 per share and now it's up 64% + dividents. So I'm quite satisfied the way it goes. Hope TSMC will be able to beat the competition and keep growing. Thank you so much for all the value your videos and the course gave me, Sven!

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  9. i dont know i do a lot research buy great company great price when they drop I never use margin I use my hard work money to put in stocks like this and I will happy if I make 10%+ but lookin at GME 300% DOGU 600% AMC 100% I don t know is it fair game or not

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  10. TSM, AMD, NVDA to me all good companies, but bad price to buy. Thanks for your reminder.

    GME on the other hand is extremely undervalued and without cyclicality obviously.

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  11. Hi Sven, great video (as always) ;). Will you do an analysis of ASML Holdings in the future?
    I'm wondering, why there is so little talk about them, even though they have a monoploy on key semiconductor tech?

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  12. I just recently bought Intel because I think they'll surprise people with their growth in the coming years. Some great value to be had, even if they grow slowly! TSM looks good too, as does the rest of the industry!

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  13. Sven, I've seen you used various aspects to evaluate intrinsic value – e.g EPS, CFC, and dividend for this case. May I ask is there a particular guideline on what to use for a certain scenario? Thanks.

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  14. TSM's manufacturing technology is 2-5 years ahead of Intel, it's 5nm process with high demand, orders queues take 2 years. However, wait until a good buying time, it's a bit expensive now.

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  15. Having a lot of friends who work at tsmc. All I’m going to say is, if you like the idea of having a huge amount of top engineers in a country to work for you not just 8 hours a day, but 24hrs on duty, taking minimum days off.

    Buy the damn stock and hold.

    There’s no such thing as a unoccupied lab at tsmc. You get my point.

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  16. Picking a stock solely based on its financials can be very misleading. Check out the story behind both companies. Intel's manufacturing woes and the global shift from x86 chip architecture to ARM can put a lot of pressure on Intel (Ex: Apple's new mac's all use ARM chips). TSM manufacturers chips both based on x86 and ARM, so its position is firm. Intel is "cheap" for a reason…

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  17. Just wondering if anybody in this comment section is researching EM as well and is considering Hollysys. That chinese company just seems too good to be true, I'm wondering if I'm missing something, like bad news/prospects. The numbers and valuation only seem to say BUY. Only issue I see so far in my reseach is the VIE structure.

    Reply

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