Artisan Global Opportunities Fund on Taiwan Semiconductor Manufacturing Company Limited
Thesis
TSMC is the leading foundry for advanced semiconductor manufacturing and occupies a bottleneck position in the AI supply chain. Revenue rose 41% and gross margin reached 66% as advanced-capacity scarcity reinforced its pricing power. The manager expects robust demand and earnings momentum given ongoing capacity constraints and recent price increases. It considers the valuation still reasonable relative to a compelling long-term profit cycle.
“We also believe the company’s bottleneck position in the AI supply chain, recent price increases and still reasonable valuation support an attractive long-term profit cycle.”
Key risks
- Current high margins and pricing power partly depend on tight advanced manufacturing capacity.
- AI-related semiconductor valuations have risen and may have pulled forward some future returns.
- Shortage-driven pricing benefits across the supply chain may be temporary.