5 Stocks That Will Benefit from CHIPS Act

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

Number of Hedge Fund Holders: 81

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures and sells integrated circuits and related semiconductor devices in Taiwan, China, Europe, the Middle East, Africa, Japan, the United States, and internationally. Although it is a Taiwanese company, the CHIPS Act will benefit TSMC as it indicated that it would begin US production in 2024. The company is now constructing a $12 billion fab in Arizona to help enhance domestic chip production. 

On July 14, Susquehanna analyst Mehdi Hosseini assigned a Neutral rating to Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) and lowered the price target on the shares to $88 from $90. The analyst observed the company’s robust revenues in 2022 actually make 2023 more challenging by comparison. He said it is encouraging to hear Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) management acknowledging a looming inventory correction, but noted the 1H23 inventory correction will be harsher than anticipated. 

According to Insider Monkey’s data, 81 hedge funds were bullish on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) at the end of Q1 2022, up from 72 funds in the last quarter. Ken Fisher’s Fisher Asset Management featured as the leading position holder in the company, with more than 26 million shares valued at $2.73 billion. 

Here is what Wedgewood Partners has to say about Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q2 2022 investor letter:

“Taiwan Semiconductor detracted from performance despite a business performance that saw revenue accelerate to over +30% growth. The Company is one of the few fabs in the world that is capable of manufacturing leading-edge integrated circuits (IC). The Company’s leading-edge capacity is being absorbed by high-performance computing applications, particularly by Apple, which has become an integrated circuit powerhouse over the past decade. The Company’s aggressive investment in leading-edge equipment, tight development with fabless IC designers, and embrace of open development libraries should continue to foster a superior competitive position and attractive long-term growth.”