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Taiwan Semiconductor: A 2022 Outlook

Kyle Cassara profile picture
Kyle Cassara


  • A number of macro tailwinds will continue to push demand through 2022 across high performance computing, automotive, and IoT.
  • While inventory correction and geopolitical risks are valid, they remain minimal in the short term.
  • Valuations continue to support investment opportunities for adding shares.

Taiwan Semiconductor Manufacturing Company (TSMC) plant in Tainan Science Park, Taiwan

BING-JHEN HONG/iStock Editorial via Getty Images

Robust demand for TSMC chips will continue in 2022 from multiple tailwinds

Taiwan Semiconductor Manufacturing Company (NYSE:TSM) has demonstrated considerable growth through 2021, with a +17.2% y/y increase in revenue over 2020

This article was written by

Kyle Cassara profile picture
~2 years global banking experience covering the TMT industry. I write for fun, test investment theses, and see what the public has to think about them

Analyst’s Disclosure: I/we have a beneficial long position in the shares of TSM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (13)

I think your revenue growth model doesn't quite make sense. When the new fabs come online and start producing wafers, revenue growth should explode. In other words, revenue growth should accelerate in 2023/2024 when fab capacity is expanded, instead you have modeled the reverse.
BigMichael profile picture
@Julian Beatty there are 29 FABS expected to be in production by 2023. Over 23 million in additional wafer starts. That has the potential for over supply and ASP drop.
@BigMichael And yet the demand for semiconductors is steadily rising every year. Increased capacity sure, but unlikely we will see an oversupply, especially in the premium bleeding edge nodes that TSMC operates.
Hung Victor profile picture
@BigMichael ASP of 28nm and above may drop.
While ASP of 7nm, 5nm, and 3nm will not drop before 2024.
All advance process contact deal already done. Intel is currently negotiating 2025 price with TSMC. That means 2024 price already fixed.
Just my 2 cents.
Dex4Sure profile picture
Long TSM
I added some recently, probably a good time now to add a little more.
Good article - thank you. TSM has been investing for a period of higher structural growth. I think that we will start to see the rewards from 2023.
Thank I am surprised that TSM share price has not increased as much as its competitors, well that is my take?
@ARNOLDMUSCAT there aren't many pure chip foundry companies to compare against. Sure, TSM stock price performed poorly against GFS, from 10-28 to today.
@ARNOLDMUSCAT Some investors fear that mainland China will overrun Taiwan, and others fear that Intel will dominate the fab market. Both scenarios are unlikely. TSMC is expanding international operations. Intel depends on TSMC for 3mn chips, regardless of their self-vaunted roadmap.
Dex4Sure profile picture
@ARNOLDMUSCAT I mean TSMC is not the kind of company that rides on hype waves, but its a safe bet. TSMC is the absolute leader in logic manufacturing with over 90% market share in the most advanced chips. Eventually market will see the value in TSMC again.
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