5 Stocks That Benefit from Global Chip Shortage

In this article, we discuss the 5 stocks that benefit from global chip shortage. If you want to read our detailed analysis of these stocks, go directly to the 10 Stocks That Benefit from Global Chip Shortage.

5. Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM)

Number of Hedge Fund Holders: 64  

Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) is ranked fifth on our list of 10 stocks that benefit from global chip shortage. The firm markets semiconductors and related products and is headquartered in Taiwan. 

On June 22, investment advisory Argus initiated coverage of Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) stock with a Buy rating and a price target of $150, appreciating a new five-year capital spending plan of the company. 

At the end of the second quarter of 2021, 64 hedge funds in the database of Insider Monkey held stakes worth $10.6 billion in Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM), down from 76 in the preceding quarter worth $10.8 billion. 

In its Q1 2021 investor letter, Bonsai Partners, an asset management firm, highlighted a few stocks and Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) was one of them. Here is what the fund said:

“Taiwan Semiconductor is the world’s largest outsourced foundry of logic semiconductor chips. TSMC’s shares appreciated 8.9% during the quarter.

Similar to last quarter, the supply-demand imbalance in semiconductor chips continues to benefit TSMC. To fuel new technological advances and meet the current supply imbalance, we see significantly increased capital spending across the industry over the coming years.

TSMC has an extraordinary track record of return on these large investments despite their rapid historical cadence of expansion. I remain hopeful that the large capital expenditure plan they now have ($100 billion of investment over the next three years) will be money well spent and not lead to industry oversupply in the medium term. Hopefully, future returns on these investments will look as good as those of the past.”