TSMC(US:TSM)2025-08-08 05:02Summary of Conference Call Notes on Taiwan Semiconductor Industry Industry Overview - Industry: Semiconductors - Key Companies: TSMC (Taiwan Semiconductor Manufacturing Company), GlobalWafers (GWC) Core Insights and Arguments 1. US Tariff Announcement: On August 6, 2025, President Trump announced a proposed 100% tariff on imported semiconductor chips, with exemptions for companies building manufacturing facilities in the US [1] 2. Impact on TSMC and GWC: TSMC and GWC are likely to be exempt from the tariff due to their US operations and expansion plans, positioning them favorably for US customers seeking domestic sourcing [2][3] 3. Investor Sentiment: The tariff exemption is expected to alleviate investor concerns regarding semiconductor tariff uncertainties, which have been a significant valuation overhang [2] 4. TSMC's Market Performance: TSMC's share price has increased by 15%, but it has underperformed compared to other AI-related companies, indicating investor concerns over geopolitical risks [3] 5. Earnings Visibility: The tariff exemption is anticipated to enhance TSMC's earnings visibility and reduce downside risks to its growth outlook, as management has already factored potential tariff impacts into their 2025 guidance [3] 6. Mature Node Capacity: The proposed tariff exemption may limit downside risks to TSMC's mature node capacity, potentially making its pricing more competitive [4][7] 7. Vanguard and UMC Implications: Vanguard may face negative implications due to lack of US exposure, while UMC's collaboration with Intel on a 12nm process lacks clarity on tariff exemption eligibility [8] Company-Specific Developments 1. TSMC's US Investment: TSMC plans to invest an additional US$100 billion in advanced semiconductor manufacturing in the US, bringing its total investment to US$165 billion, including multiple fabrication plants and R&D centers [9] 2. GWC's Expansion: GWC is expanding its capacity in the US, with significant customer interest in US-based products due to localization trends. Revenue is expected to ramp up gradually from 2H25 to 1H26 [10] Investment Thesis 1. TSMC: TSMC is viewed as a leading global foundry with over 60% market share, positioned to capture long-term growth opportunities in AI, 5G, HPC, and EV sectors. The stock is rated as a Buy with a target price of NT$1,370 [12][13][14] 2. GWC: GWC is rated Neutral due to slower end-demand recovery and high inventory levels among key customers, with a target price of NT$380 [16][19][18] Risks and Considerations 1. TSMC Risks: Key risks include deterioration in end-demand recovery, slower customer node migrations, and increased competition affecting profitability [15] 2. GWC Risks: Risks include fluctuations in end-demand recovery, competition, and production costs [20] Additional Insights - The tariff situation is expected to shift the cost dynamics in the semiconductor industry, potentially benefiting companies like TSMC that can offer competitive pricing while ensuring supply chain security [7]