5 Best EV Stocks for the Long Term

2. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)

Number of Hedge Fund Holders: 64  

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is featured on our list of long-term EV stocks since it is perhaps the biggest chipmaker in the world. Semiconductor chips form an integral part of EV manufacturing, the importance of which can be gauged from the fact that a recent chip shortage has resulted in large delays in EV production around the world, with even established car makers struggling to meet pre-orders. 

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) recently announced that it would be setting up a semiconductor manufacturing plant in Japan as part of an expansion plan with electronics firm Sony Corporation. 

At the end of the second quarter of 2021, 64 hedge funds in the database of Insider Monkey held stakes worth $10.6 billion in Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM).

In its Q1 2021 investor letter, Bonsai Partners, an asset management firm, highlighted a few stocks and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was one of them. Here is what the fund said:

“Taiwan Semiconductor is the world’s largest outsourced foundry of logic semiconductor chips. TSMC’s shares appreciated 8.9% during the quarter.

Similar to last quarter, the supply-demand imbalance in semiconductor chips continues to benefit TSMC. To fuel new technological advances and meet the current supply imbalance, we see significantly increased capital spending across the industry over the coming years.

TSMC has an extraordinary track record of return on these large investments despite their rapid historical cadence of expansion. I remain hopeful that the large capital expenditure plan they now have ($100 billion of investment over the next three years) will be money well spent and not lead to industry oversupply in the medium term. Hopefully, future returns on these investments will look as good as those of the past.”