In the early days of the semiconductor industry, it was commonplace for most IC design houses to own and operate their own semiconductor manufacturing facilities. Indeed, everything from the development of the manufacturing recipe to the purchase of equipment was done at any firm that wanted to develop and sell semiconductor products. Fortunately, Taiwan Semiconductor (NYSE:TSM) - led by Dr. Morris Chang - pioneered what is today known as the "fabless" model. That is, the burden of process technology development and equipment purchases would fall upon a central foundry, which would then amortize the fixed R&D and capital expenditures over a fairly large and diverse clientele base.
It is my view that shares of Taiwan Semiconductor offer 25-27%...
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