5 Stocks That Will Suffer If China Invades Taiwan

4. 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 semiconductor devices in Taiwan, China, Europe, the Middle East, Africa, Japan, the United States, and internationally. TSMC Chair Mark Liu said on August 2 that if China were to invade Taiwan, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s factories would be rendered “not operable”. The company will be one of the worst hit firms in case of a Chinese invasion. 

On August 1, Susquehanna analyst Mehdi Hosseini lowered the price target on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) to $88 from $90 and kept a Neutral rating on the shares. The analyst observed Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s robust revenues in 2022 actually make 2023 more challenging. He said it is encouraging to see Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) noting a looming inventory correction, but said the 1H23 inventory correction will be harsher than expected.

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 earlier quarter. Ken Fisher’s Fisher Asset Management is the leading stakeholder of the company, with more than 26 million shares worth $2.7 billion. 

Here is what ClearBridge International Growth EAFE Portfolio has to say about Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q2 2022 investor letter:

“Disciplined selling is a key component of our risk-based approach, especially among companies with cyclical growth drivers. We have seen good success over the last several years from our semiconductor exposure but have been taking profits in companies such as, this quarter in Taiwan Semiconductor (NYSE:TSM) to reduce overall industry exposure. Given the exceptional sets of circumstances of semi shortages, double ordering and good growth in end market products including personal electronics and even data centers, we believe a neutral market position to this industry within the tech sector is appropriate.”