To The Moon

🌟🌟🌟TSMC $Taiwan Semiconductor Manufacturing(TSM)$  isn't just a chipmaker.  It is the world's largest foundry for advanced semiconductors, the silent architect behind Nvidia $NVIDIA(NVDA)$  AI, $Advanced Micro Devices(AMD)$  GPUs,  Apple's silicon and the servers powering tomorrow's AI.    On Friday, TSMC dropped 6% to USD 280.66, triggering a wave of doubt in a market already melting.  But this isn't just a price drop.  It is a conviction checkpoint.

AI Momentum vs Supply Strains :

Revenue : USD 32.47 billion up 30% YoY, beating forecasts.

Gross margins - 57% reflecting pricing power and scale. 

AI and HPC : Drove 60% of Q3 revenue, offsetting weakness in smart phone and consumer tech.

Advanced Nodes : 3nm and 5nm now make up 74% of wafer revenue.

Packaging Bottlenecks : Still present but demand is overwhelming delays.

Full year forecast raised :  Despite the dip, TSMC remains bullish.

Why Buy TSMC?

TSMC is the silent architect of the AI revolution, manufacturing chips for Apple, Nvidia, AMD, Qualcomm and much more.  It does not design chips.  It builds them, using the most advanced nodes (3nm, 2nm and soon 1.4 mm).

TSMC owns :

60% of the global foundry market.

90% of the most advanced chip production.

USD 1.5 Trillion market cap, making it one of the most valuable tech firms globally. 

AI Supercycle and Strategic Dominance :

AI Chip sales tripled in 2024, expected to double again in 2025 with 40% annual growth projected for the next 5 years.

TSMC is investing USD 38 to USD 42 billion in 2025, mostly in advanced nodes and packaging.

Mass production of 2nm chips begins in Q4 25 with 1.4 nm fabs planned by 2028.

Analysts Expectations and Price Targets:

Goldman Sachs : Buy with Target price of USD 340.

Morgan Stanley : Overweight, Target price USD 325.

Barclays: Hold, Target price USD 310.

Current price : USD 280.66.

Most analysts see the dip as a buying opportunity , not a breakdown. 

Risks to Watch :

Geopolitical tension : Taiwan 's strategic location makes it vulnerable to US China friction.

Supply chain strain :  Advanced packaging and skilled labour shortages could delay production.

Cyclicality :  Weak demand in smartphones and PCs may offset AI strength short term.

Concluding Thoughts 

TSMC isn't just a stock.  It is a pillar of innovation and the silent architect of the AI revolution.   I see the current price dip as a great opportunity to buy TSMC, the world's largest foundry for advanced chips.

As Warren Buffett likes to say When there is Fear in the markets it is time to be greedy. 

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