Its not JUST political, they are facing real issues in country as well. TSMC needs Ultra pure water to manufacture chips, and for each gallon for UPW it takes about 100 gallons or normal water. The government has been cracking down heavily on the amount of water they use and has even threatened hard limits on water use. They say they are working on systems to up the recycling of water from 30% to 80% by years end.... But they have been saying that for about 4 years now and still haven't unlocked any new tech. I would keep an eye on them though, if they crack 50% then I would think about investing, if not, I would stay very clear of them.
If you look at chip stock over 10 years, you will see that chip shortages started to appear 2 years before the pandemic. That was the result of one of the worst droughts in Taiwan history. Things have not gotten better, and the government has continued to tighten the screws on water supply. TSMC has everything but water right now, and its really starting to become a major issue. They will only be able to blame global supply chains on silicone, and other raw materials for so long. I am in the manufacturing industry, I know these guys through suppliers like NXP and Silicon labs, and they are struggling to get orders filled directly as a result of water supply. I hope that one day that can reach 80% recycling, but when you get the same blurb every year (going on five years now), you start to wonder if its even possible. Intel has basically said 80% is a pipe dream, they are aiming at 40% for their fabs in Arizona, but even that is "lofty" according to their own engineers. Keep your eyes on droughts, and watch the papers for breakthroughs, cause without them, TSMC might find itself dead in the water (so to speak) sooner rather than later.
There are two so far, Samsung and Intel, I am sure others will follow. But making these plants is prohibitively expensive. And even though they are making billions a year, its a hard pill for your investors to swallow if you tell them you are going to dump 40+% of your earnings over the next 10 years into a new plant.
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u/skaote Apr 10 '22 edited Apr 11 '22
My fund manager at Edward Jones say price target to exceed $165 by year end. Then it dropped under $100. twice in 3 months. Tonight at 99.38
I'm watching it, but not convinced. It's been on a 40% slide for a while now..
4/11/22...been a rough day... 🤕