Buffett's TSMC purchase
Does anyone with semi-conductor experience here really understand why Buffett bought TSMC? I have personally thought of that space as very competitive with leadership change every few years (Intel few years ago, IBM before that). Doesn't look like your typical Buffett purchase.
Got too cheap. With 3% div at ~$60 also has huge market share & growing still.
if China invades Taiwan, does this mean now US has to intervene to protect American interests?
Even before this, the USA will literally go to all out war before allowing TSM to fall into PRoC hands.
That seems like a gross simplification. There a couple of different scenarios that could play out of China invades Taiwan. The most probable is that TSM employees self destruct the fabs before fleeing to the US. The US/world looses a generation of fab tech and the US imposes heavy sanctions on China.
I have >25 years of semi experience: Buffet bought TSMC because they're 1) reasonably priced 2) have a technology lead that's very hard to close 3) have a customer engagement model that's impossible ( not hard, impossible) to beat
Intel thought the same…
They’re the best at what they do and their huge customers are locked in.
US only cares about semiconductor supply. If they invade before the phoenix factory is productive then yes they will have to intervene. If the US factory is pumping semiconductors they will send a very strongly worded email instead 😂😂😂
The Phoenix factory is a generation behind. Not supporting one outcome or the other but just something to note.
@ueyfh can you elaborate on point 3 plz
TSMC knows how to balance customer needs with silicon capabilities and EDA tool capabilities. Intel doesn't, Samsung sort-of-doesn't
@ueyfh How do you know that Smasung or Intel wont lead the next-generation of Silicon node process? I think (correct me if I'm wrong) that TSMC surpassed Intel in node process only recently (which would've been unthinkable 10 years ago).
I mean it's a no brainier https://www.theverge.com/2022/12/6/23497417/apple-tsmc-phoenix-fab-plans-biden-amd-nvidia
That means more supply of chips, along with Intel also building more. Consumer devices got a huge bump from COVID, we are going to have a ton of supply and lower demand = Pricing pressure