Andrew Wang says that the semiconductors sector has good visibility as lead times extend to 12-50 weeks. He also discusses Taiwan Semiconductor Company (TSM) which reported earnings of $0.96 in EPS and $12.92B in revenue.

Key takeaways:

  • Semiconductor are in high demand from massive emerging trends including cloud computing, 5G wireless networks, and artificial intelligence.
  • Chip shortages are expected to cause widespread shortages of everything, from electronics to medical devices to technology and networking equipment.
  • The Biden Administration could subsidize the construction of new U.S. semiconductor manufacturing capacity.

Taiwan Semiconductor Manufacturing Company (TSM)

  • Investing in TSM gives you ownership in the world’s largest semiconductor foundry — with over 50% of total foundry market share.
  • Its top customers include Apple, Huawei, and AMD, Broadcom, Marvell, Nvidia, and Qualcomm.
  • The company is entering a healthy growth period, setting up for a multi-year tight capacity environment particularly at the leading edge.
  • Growth drivers continue to be in 5G and high-performance computing (HPC) – that includes gaming, AI and PC peripheral orders.Shares have recovered to pre-pandemic levels.
  • Stock is selling at 12.5x '22 consensus earnings estimates of $3.00.
  • Annual dividend of $1.08 per share, with a dividend yield of 2.9%.

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What are your thoughts on tech and semiconductors?