[On :freetrade:] TSMC (TSM)

www.google.com/finance?q=nyse:tsm

These are the manufacturer who made the first 7nonometer chips going to be used for AMD and apple uses these chips too. Would be good to have these in the list so we can potentially get these. Is that possible ???

Their stocks are traded on the NYSE so it should be possible to add them :smile: lets see how many votes they get..

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The company behind the manufacture of AMD’s chipsets. Worth having if AMD is available.

TSMC is on freetrade

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Requesting stock to be available

Hi Luke its already here. TSM

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Only on the basic account not ISA.

Is there a reason TSM can’t be held in an ISA?

I believe it is an ADR and so cannot be added into an ISA as it only represents a share held on a stock exchange which is not accepted by HMRC.

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Thanks for the reply :slight_smile:
It was a bit confusing as it shows listed on NYSE, and yet the name did not make me think it’s not a US stock. The hint was in “Taiwan” :rofl:

Having held AMD for quite a long time I had been considering TSMC but I wasn’t sure about the value of manufacture and I was put off by the political risk, however I recently pulled the trigger and bought in. I came across this article linked on another forum which influenced my decision somewhat so I’ll share that in case anyone is interested (I don’t know how reputable this is so I’m not weighing in on its accuracy)

With a lot of the news flying around recently (AMD’s rise, Apple’s move to ARM, Intel’s ongoing struggles to shrink transistors) it seems like TSMC is the belle of the ball in the semi foundry market, so I’m trying to justify my decision to hold this.

I’m keen to hear what other people’s views on this are, either those holding or selling. As TSMC reaches new ATH prices is this hysteria / FOMO or do you think the growth is fair given the positive outlook for their 5nm fabrication?

More generally how do you feel about the political risk and what are your thoughts on holding a manufacturer (TSMC) over a designer (AMD)?

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This was exactly why I wanted to hold some TSMC. Apple switching to ARM only added weight to that decision. I don’t hold the stock solo though, I’ve got my largest holding via Baillie Giffords Positive Change fund.

Intel need to pull their finger out.

People have been speculating about Intel moving to TSMC fab for quite a while, but the continued troubles with 10nm and 7nm yields suggested by the delays announced yesterday might now be forcing the issue.

The article below discusses what this might mean for TSMC

Well that materialised very quickly.

With AMD and Intel fighting over a limited number of wafers the ball should be firmly in TSMC’s court, it’ll be interesting to see how much profit the 2 designers can hold on to.

[Edit] - I’ve seen some speculation that this may be poor quality journalism and the Intel order is not 180,000 wafers but 180,000 chips (~2000 wafers) - I guess we’ll have to wait and see how big this news is.

AMD’s next report may help TSMC’s share price rise further.

TSMC just held their 2020 Technology Symposium, based on their roadmap and the yields they are achieving on 5N I’m increasingly confident that they can retain (or even extend) the lead they have taken over Samsung and Intel into 2021 and 2022. I think their massive installed EUV capacity is really starting to give them an edge.

No idea how this this technological advantage will impact their earnings or share price though, seems the markets are already pricing an optimistic outlook for them.

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Nice to see TSMC’s claims regarding their progress with 5N all but confirmed by Apple’s A14 announcement today (and the corresponding share price bump).

Should give confidence for AMD (Zen4, RDNA3) and Qualcomm (Snapdragon 875) who will be the other big upcoming 5N customers next year. Hopefully they can achieve similar gains on their new chips.

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An interesting piece looking at estimating wafer costs for each of TSMCs nodes.

The bit I found interesting is when you compare a theoretical chip price across nodes.

But even at current costs it makes a great sense for makers of highly-complex chips to use TSMC’s leading-edge process because of its high transistor density as well as performance. Based on the numbers provided, it costs $238 to make a 610mm2 chip using N5 and $233 to produce the same chip using N7.

Even the staggeringly high cost of a N5 wafer is economical because of the increased density. That’s not something I fully appreciated.

Just in case anyone is interested, I wanted to review my decision 3 months in to check I’m still happy with this - not advice.

On EUV capacity

TSMC should have received / installed 50 of ASML’s EUV machines by the end of 2021 with Samsung expected to lag behind at 25.

https://www.digitimes.com.tw/tech/dt/n/shwnws.asp?cnlid=1&id=0000594851_Y6H7KHN76G4AXI0F62YVR (need to translate)

If ASML’s production capacity is as expected for 2020 and 2021 this means TSMC should retain its dominant position in small feature sizes because there simply wont be enough capacity going anywhere else.

If EUV lithography is going to be pretty much essential for any advanced process going onwards this advantage should be almost insurmountable in the near term.

On new N3 and N2 process

So while it looks like we can expect TSMC to retain the advantage on feature sizes, there is a potential bump in 2022 when they will still be using FinFET while Samsung will have moved to GAA transistors. It will be interesting to see if Samsung (and its customers) can capitalise on their GAA advantage before TSMC’s N2 node arrives in 2023 which is expected to be using GAA transistors.

Review

My biggest concerns at this point are unchanged:

  • Political risk
  • Global downturn in semiconductor demand
  • Natural disaster
  • Samsung’s lead in GAA transistors

I am now also a bit worried that TSMC is getting very expensive with a market cap of ~$400bn and a trailing p/e of ~25, hopefully it can grow into that valuation. On balance I’m happy to to hold TSMC despite the significant increase in price, it feels somewhat justified.