How much do you consider Taiwanese tension with Ccp? If TSM makes up a significant chunk of portfolio, would you hedge it with INTC in case tensions exceed any expectations?
Thanks for the great article. Just a small note, DCE in company presentations stand for Digital Consumer Electronics rather than Datacenter Comms.
In Q4 2020, 49% of TSM revenue came from advance nodes (7 & 5 nm). Now, in the next couple of years this number is likely to be close to 70-80%. First, this gives a margin of safety that the company can maintain its guided 50% margins. Second, it will enable massive revenue growth as ASP will grow with higher advance node mix.
I personally believe if utilization rates stay as high and forex is favorable, gross margins will likely be 52%-54%. I also think that 10-15% revenue CAGR is conservative guidance, I think they will deliver 15-20% CAGR until 2025 (if not more). Hence, I assume earnings of ~$10 per ADS in 2025, and at a conservative 20 p/e gives $200 for TSM stock in 2025 earnings. I do however take my model as conservative given growing ASP at advance nodes and how fast revenue for the company can grow.
You've mentioned auto as a driver of semi demand in coming years (higher silicon content per car etc). Any insights into Indie Semi which is being taken public by a SPAC ($THBR)? It looks pretty early stage but they boast a nice backlog. Curious if you have any thoughts! Cheers
How much do you consider Taiwanese tension with Ccp? If TSM makes up a significant chunk of portfolio, would you hedge it with INTC in case tensions exceed any expectations?
Thanks for the great article. Just a small note, DCE in company presentations stand for Digital Consumer Electronics rather than Datacenter Comms.
In Q4 2020, 49% of TSM revenue came from advance nodes (7 & 5 nm). Now, in the next couple of years this number is likely to be close to 70-80%. First, this gives a margin of safety that the company can maintain its guided 50% margins. Second, it will enable massive revenue growth as ASP will grow with higher advance node mix.
I personally believe if utilization rates stay as high and forex is favorable, gross margins will likely be 52%-54%. I also think that 10-15% revenue CAGR is conservative guidance, I think they will deliver 15-20% CAGR until 2025 (if not more). Hence, I assume earnings of ~$10 per ADS in 2025, and at a conservative 20 p/e gives $200 for TSM stock in 2025 earnings. I do however take my model as conservative given growing ASP at advance nodes and how fast revenue for the company can grow.
You've mentioned auto as a driver of semi demand in coming years (higher silicon content per car etc). Any insights into Indie Semi which is being taken public by a SPAC ($THBR)? It looks pretty early stage but they boast a nice backlog. Curious if you have any thoughts! Cheers