Sands Capital Management, LLC - International Growth on Taiwan Semiconductor Manufacturing Company
Thesis
TSMC is viewed as the world's largest scaled manufacturer of leading-edge chips and a central beneficiary of AI demand. First-quarter gross margin exceeded expectations, which Sands attributes to strong demand for leading-edge nodes and advanced packaging rather than unsustainable pricing. Demand for N2 through N5 nodes should support the company's role in AI CPUs and accelerator chips. Continued customer reliance on TSMC after testing alternative packaging technologies reinforces the perceived technology and ecosystem advantage.
“We believe that major customers’ continued reliance on TSMC, even after testing alternatives, underscores the company’s technological advantage and ecosystem depth.”
Key risks
- Competitor advances in semiconductor packaging