I enjoyed today’s article from the FT team 
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TSMC is many years and many tens of billions in investment ahead of the competition, I remain long on TSMC the 5th wave of computing has only just begun.
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I wished that article would have mentioned ASML, who make the machines that make the machines. They also didn’t do a thorough find and replace of the words “Games Workshop” 
Another interesting company would be NXP, who design chips for the car industry.
Some further background on TSM in a recent FT article.
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TSMC to Spend $100 Billion Over Three Years to Grow Capacity
It’s insane that one company is looking to spend about as much as the UK’s ‘once in a generation’ post-corona infrastructure investments.
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Looks like Fundsmith has started a small position ($13M) in TSMC; their first APAC stock i believe
How much of that 100bn do you reckon will go to ASML for DUV/EUV?
Must be 50+ units at 150 each so perhaps 7.5bn if they are 3400s
I imagine the TSMC N3 fabs might be using the next generation of high NA machine which are rumoured to be north of $200m each so maybe well over $10bn
Actually these unit number are way too low, I’ll do some maths later
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Is there a reason this is non-ISA only?
It’s not an American company and so it operates as an ADR, which makes in ineligible for ISA.
So from a quick look I think TSMC bought about 25 EUV scanners in 2020 from a total spend of about 18bn so very crudely about 20-25% capex went to ASML EUV.
So that might put a 100bn spend at around 20-25bn on EUV for perhaps 120-130 scanners. Even with ASML set to double volumes that pretty much all their capacity into 2023.
For ArF immersion DUV ASML don’t have a complete monopoly, so Nikon might take a bit.
It’s hard to know how many layers of EUV vs DUV will be used in future process nodes. I think for N5 it’s about 12 layers of EUV for about 60 layers of DUV. Although generally each EUV layer can replace 10 DUV layers so the trend has been for fewer total layers.
DUV scanners have about double the throughput of EUV so you don’t necessarily need many more units so maybe another 150 DUV units for 7.5-10bn
So maybe in total more like 30bn of this to ASML, it’s hard to see how there is going to be enough capacity with both Intel and Samsung also committed to significant expansion, it feels like someone is going to miss out.
I think it’s all priced in already as ASML has continued to surge during the semiconductor shortage.
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So TSMC is now down almost 50% since Jan 2022, and I find it perplexing that the world’s biggest chip maker, and one of the most profit generating companies on earth, is so affecting by geopolitics.
How dangerous is this talk that China would nationalise TSMC? Surely its madness to consider given that would immediately force a huge move to ban the sale of their chips.
TSMC is getting more competition from Samsung, but surely the company is worth a lot more than it did 2 years ago? Any opinions?
I’ve noticed that some fund managers are adding exposure to TSM as well as Samsung and Mediatek
TSMC was trading at a premium to its long term multiple so there was always some downside risk. I think the reduction in price is more down to recession fears rather than geopolitics
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Totally agree with you
Downward slide continues across all Chip manufacturers… any opinions here? Naively i feel chips are like the new oil, and (at least TSMC and AMD) have what looks to me like super healthy balance sheets. What gives?
Just to reiterate. Low demand. Weak consumer market will mean cancelled orders for chips
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and now the US has had another brain fart and banned the chip sales to China
I just give up
https://focustaiwan.tw/business/202210090008
Is there a certain reason why you can buy this in the ISA