2. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders In Q2 2024: 156
Shares Short % Of Outstanding: 0.5%
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the world’s biggest contract chip manufacturer. The firm covers the chip manufacturing needs of all the biggest companies in the world such as Apple, NVIDIA, QUALCOMM, and AMD. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s lead in the industry is also evident by the fact that the former chipmaking crown holder Intel is also expected to use the firm’s 3-nanometer process for some portions of its processors. Consequently, as chip making is an extremely capitally extensive endeavor that requires billions in investment and years of research, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has a wide moat in the industry which is quite unlikely to be affected. However, Intel is the current underdog in the chipmaking industry and is aiming to set up its contract chipmaking business. Coupled with the geopolitical risks associated with Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) Taiwan-based manufacturing, these two factors could shift the narrative around the company in the not-so-distant future.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is currently diversifying its production base and building a chipmaking plant in Arizona. Here’s what it said about the facility during its Q3 2024 earnings call:
“Next, let me talk about our global manufacturing footprint update. TSMC’s mission is to be the trusted technology and capacity provider of the global logic IC industry for years to come. All of our overseas decisions are based on our customers’ needs.
They value some geographic flexibility and necessary level of government support. This is also to maximize the value of our shareholders. In Arizona, we have received strong commitment and support from our U.S. customers and the U.S. federal, state, and city governments and have made significant progress in the past several months. Our plan to build three fabs, will help create greater economies of scale, as each of our fabs in Arizona will have a clean room area that is approximately double the size of a typical logical fab. Our first fab entered engineered wafer production in April with 4-nanometer process technology, and the result is highly satisfactory with a very good yield. This is an important operational milestone for TSMC and our customers, demonstrating TSMC’s strong manufacturing capability and execution.
We now expect volume production of our first fab to start in the beginning of 2025 and are confident to deliver same level of manufacturing quality and reliability from our fab in Arizona as from our fabs in Taiwan. Our second and third fabs will utilize more advanced technologies based on our customers’ needs. The second fab is scheduled to begin volume production in 2028, and our third fab will begin production by the end of the decade. Thus, TSMC will continue to play a critical and integral role in enabling our customers’ success while remaining a key partner and enabler of the U.S. semiconductor industry.”
