Core Insights - The article emphasizes the importance of innovation and disruption in the financial sector, particularly focusing on high-tech and early growth companies [1] Company Analysis - The analysis highlights a beneficial long position in TSM shares, indicating confidence in the company's future performance [2] - The article reflects a personal opinion of the author, suggesting a strong belief in the potential of TSM and its market position [2] Industry Trends - There is a growing interest in growth buyouts and value stocks, which are seen as key investment opportunities in the current market landscape [1] - The pace of technological advancement is a critical factor influencing investment decisions in the industry [1]

Group 1 - Taiwan Semiconductor Manufacturing Company (TSM) is considered a crucial player in the world economy for the coming years [1] - The focus is on identifying companies with a market capitalization of less than $10 billion that can reinvest capital for impressive returns [1] - The ideal companies should demonstrate a long-term capability of capital compounding with a high compound annual growth rate to potentially deliver tenfold returns or greater [1] Group 2 - A conservative investment strategy is primarily adopted, with occasional pursuit of opportunities that have a favorable risk-reward ratio [1] - The approach emphasizes maintaining a long-term perspective on investments to generate higher returns compared to market indices [1] - The allocation of investments is carefully considered to maintain overall portfolio stability [1]

Investment Rating - The industry investment rating is classified as In-Line [8]. Core Insights - The report addresses the mismatch in AWS Trainium2/2.5 chip shipments attributed to unstable PCB yield rates, with an expectation of approximately 1.1 million chip shipments in 2025 [1][3]. - Supply chain checks estimate total shipments for the Trainium2/2.5 life cycle (2H24 to 1H26) at 1.9 million units, with a focus on production and consumption in 2025 [2][11]. - The report highlights a significant gap between upstream chip production and downstream consumption, suggesting improvements in yield rates may reduce this gap by 2H25 [6][11]. Upstream - Chip Output Perspective - As of late 2024, 0.3 million units of Trainium2 chips were produced, with a projected total of 1.1 million shipments in 2025, primarily packaged by TSMC (70%) and ASE (30%) [3][11]. - An additional 0.5 million Trainium2.5 chips are expected to be produced in 1H26, bringing the total life cycle shipments to 1.9 million units [3]. Midstream - PCB Perspective - Downstream checks indicate potential shipments exceeding 1.8 million units of Trainium chips, averaging around 200K per month since April [4][11]. - Key suppliers for PCB boards include Gold Circuit and King Slide, which provide essential components for Trainium computing trays [4]. Downstream - Server Rack System Perspective - Wiwynn is identified as a key supplier for server rack assembly, with revenue from AWS Trainium2 servers increasing in 1Q25, aligning with the upstream chip production estimates [5][11]. - The report notes that each server rack can accommodate 32 chips, supporting the projected consumption figures [5]. Component Suppliers - Major suppliers for Trainium2 AI ASIC servers include AVC for thermal solutions, Lite-On Tech for power supply, and Samsung for memory components [10][18]. - Other notable suppliers include King Slide for rail kits and Bizlink for interconnect solutions [10][18]. Future Projections - For Trainium3, shipments are estimated at 650K for 2026, with production managed by Alchip [12][13]. - The report anticipates that Trainium4 will enter small production by late 2027, with a rapid ramp-up expected in 2028 [14].

Company Overview - Proactive is a financial news publisher that provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The company has a team of experienced and qualified news journalists who produce independent content [2] Market Focus - Proactive specializes in medium and small-cap markets while also covering blue-chip companies, commodities, and broader investment stories [3] - The content includes insights across various sectors such as biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto, and emerging digital and EV technologies [3] Technology Adoption - Proactive is recognized for its forward-looking approach and enthusiastic adoption of technology to enhance workflows [4] - The company utilizes automation and software tools, including generative AI, while ensuring that all content is edited and authored by humans [5]

Core Viewpoint - Long-term investing in Taiwan Semiconductor Manufacturing (TSMC) is recommended due to its strong market position, continuous innovation, and substantial growth potential. Group 1: Company Strengths - TSMC is the world's leading contract chip manufacturer with a strong client base including major companies like Nvidia and Apple, making it difficult for clients to replace TSMC as a supplier [3] - The company has a culture of continuous innovation, with upcoming launches of 2 nanometer chips later this year and 1.6 nanometer chips in 2026, positioning TSMC as a leader in advanced technology [4] - TSMC achieves high chip yields of 90% or greater, significantly outperforming competitors who struggle with yields around 50%, which enhances its competitive edge [5] Group 2: Risk Mitigation - TSMC is diversifying its production facilities globally, investing $165 billion in the U.S. and establishing facilities in Japan and Germany to reduce risks associated with its proximity to mainland China [6] - The potential threat from China is mitigated by TSMC's global customer base, making a market crash unlikely in the event of geopolitical tensions [7] Group 3: Growth Projections - TSMC's management anticipates a 45% compound annual growth rate (CAGR) in AI-related revenue and nearly 20% CAGR in total revenue over the next five years, indicating strong growth prospects [8] - The long-term outlook remains positive due to the increasing demand for technology, ensuring continued demand for TSMC's chips [9] Group 4: Financial Performance - TSMC consistently achieves profit margins greater than 40%, resulting in substantial cash flows for reinvestment, stock repurchase, or dividends [10][12] - The company offers a solid dividend yield of 1.2%, which has been consistently increased over the years, contributing to the investment thesis [13][15] - TSMC's stock is trading at 24.9 times forward earnings, which is comparable to the broader market's 23.2 times, making it a fair investment given its growth potential [16][18]

Core Insights - TSMC reported a 40% increase in half-year revenue, reaching NT$1.77 trillion (US$60.8 billion), driven by strong demand for AI technology [2][5] - The company anticipates record earnings for the year, attributing this to sustained high demand for artificial intelligence [2] - Recent sales growth was influenced by companies stockpiling chips in response to potential tariffs from the US [2][3] Company Performance - TSMC's revenue growth reflects its position as the world's largest contract chip manufacturer, serving major clients like Nvidia and Apple [2] - The company expects continued strong performance despite potential impacts from tariffs, indicating resilience in its business model [3] Market Context - The surge in demand for chips is linked to the broader economic reliance on semiconductor technology across various sectors [1] - TSMC's proactive measures, including increased investment in the US and enhanced defense spending, aim to mitigate the impact of US tariffs [4]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1][2]. Company Overview: TSMC - TSMC currently holds a Momentum Style Score of B and a Zacks Rank of 2 (Buy), indicating strong potential for outperformance in the market [3][4]. - The stock has shown a price increase of 2.73% over the past week, matching the performance of the Zacks Semiconductor - Circuit Foundry industry [6]. - Over the last month, TSMC's shares have increased by 7.25%, consistent with the industry's performance [6]. - In the longer term, TSMC shares have risen by 44.83% over the past quarter and 23.49% over the last year, outperforming the S&P 500's gains of 25.34% and 13.06%, respectively [7]. Trading Volume - TSMC's average 20-day trading volume is 9,544,473 shares, which serves as a bullish indicator when combined with rising stock prices [8]. Earnings Outlook - Recent earnings estimate revisions for TSMC have been positive, with two estimates moving higher for the full year, raising the consensus estimate from $9.19 to $9.44 over the past 60 days [10]. - For the next fiscal year, two estimates have also increased, with no downward revisions noted [10]. Conclusion - Given the positive momentum indicators and earnings outlook, TSMC is positioned as a strong buy candidate for investors seeking short-term opportunities [12].

Oliver Rodzianko is the Founder and Chief Executive Officer of Invictus Origin, a pioneering high-alpha investment company launched in May 2025 that is on trajectory to deliver among the highest annual returns in the world. Invictus Origin is developing innovative portfolio strategies, notably through its flagship High-Alpha Black Swan Portfolio (also known as the Invictus Hydra Portfolio), strategically designed to sustainably and significantly outperform leading indices, including the Nasdaq-100. Distinct ...

Investment Rating - The industry investment rating is "In-Line" for Greater China Technology Semiconductors [2]. Core Insights - The report highlights the growth potential in China's AI semiconductor sector, with a forecasted capital expenditure increase of 62% year-over-year to RMB 373 billion for the top six companies [19]. - TSMC's revenue guidance for Q3 2025 indicates a potential growth of approximately 3% quarter-over-quarter in USD, but a decline of 1.6% in TWD [12]. - The report anticipates that China's local GPU market will significantly expand, with local GPU revenue projected to reach RMB 287 billion by 2027, driven by advancements in SMIC's leading node capacity [33]. Summary by Sections Valuation Comparison - TSMC's target price is set at 1,288 TWD, representing a 19% upside potential, with an estimated P/E ratio of 23.9x for 2024 [8]. - The average EPS growth for the semiconductor sector is projected at 40% for 2024, with a mean P/B ratio of 2.3x [8]. - The memory segment shows a notable upside potential for Giga Device, with a target price of 145.0 CNY, indicating a 20% upside [9]. TSMC Preview - TSMC's Q3 2025 revenue is estimated at NT$ 910 billion, with a gross profit of NT$ 508 billion, reflecting a year-over-year growth of 35.1% [12]. - The gross margin is expected to be 55.8%, while the operating margin is projected at 45.5% [12]. China AI Semiconductor Demand - The report projects that China's GPU self-sufficiency ratio will increase from 34% in 2024 to 82% by 2027, indicating a strong trend towards domestic production [28]. - The total addressable market (TAM) for cloud AI in China is expected to reach USD 48 billion by 2027 [30].

Last time I called Taiwan Semiconductor Manufacturing Company Limited, aka TSMC (NYSE: TSM ), a Buy, it was doubling down on the company's perspectives on fundamentals, in spite of the macro overhang and the chaos brought to markets byI'm a full-time analyst and portfolio manager of a technology fund with 5 years of experience. I graduated in Mechanical Engineering from the Federal University of Rio de Janeiro (Brazil) and École Centrale de Lyon (France). I'm currently licensed by the Brazilian Securities C ...