2. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Tianqiao’ Stake Value: $84.1 million
Percentage of Chen Tianqiao’s 13F Portfolio: 6.85%
Number of Hedge Fund Holders: 64
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a Taiwanese multinational semiconductor manufacturing company. Ranked second on the list of the 10 tech stocks Chinese billionaire Chen Tianqiao loves, the company operates as the world’s largest semiconductor foundry, involved in the design and manufacture of integrated circuits, as well as semiconductors for various electronics.
On July 15, the company released its quarterly earnings report for the second quarter of 2021, with reported earnings per share at $0.93, beating estimates by $0.01. On the other hand, the company generated revenues amounting to $13.32 billion, falling short of the estimated revenues by $2.77 million.
At present, Chen Tianqiao holds 700,000 share of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), worth $84.1 million and representing 6.85% of his investment fund’s portfolio value. By the end of the second quarter of 2021, 64 hedge funds out of the 873 tracked by Insider Monkey held stakes in Taiwan Semiconductor Manufacturing Company (NYSE:TSM), worth roughly $10.4 billion, down from 76 hedge funds in the preceding quarter with stakes worth approximately $10.8 billion.
In the Q2 2021 investor letter of Wedgewood Partners, the fund mentioned Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). Here is what they said:
“We initiated a new position in Taiwan Semiconductor Manufacturing, the largest contract manufacturer of logic semiconductors in the world. The Company has invested prodigious amounts of capital ($17 billion in 2020 alone and as much as $28 billion this year) over the past several years, at returns that suggest to us a very steep and sustainable competitive advantage. The Company has a very long runway to grow its business at a double-digit rate, driven by several favorable industry and company-specific trends including semiconductor architectural design changes, increasing manufacturing process complexity, and the proliferation of more logic semiconductors in more devices.
With over 50% market share, more than 3X that of its next largest competitor, Samsung, the Company dominates the contract foundry industry for logic semiconductors (source: Trendforce). Taiwan Semi has erected a formidable competitive barrier with its manufacturing capacity, as the Company carries over $150 billion in gross PPE (property, plant, and equipment) on its balance sheet. This would put the Company in the top echelons of invested tangible capital, globally. Further, the Company has committed to a multi-year, $100 billion capital investment program aimed at building out some of the only capacity capable of manufacturing leading-edge, sub 7 nanometers (nm) resolution integrated circuits. While semiconductor cycles are notoriously boom-bust, the Company has already secured enough demand to drive very high utilization rates for this new bleeding-edge capacity much earlier compared to previous capacity rollouts…” (Click here to see the full text)
