Chinese Billionaire Chen Tianqiao’s Top 5 Stock Picks

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

The chipmaker Taiwan Semiconductor Co Ltd (NYSE: TSM) is a member of billionaire Chen Tianqiao’s top 10 stock picks list. His investment firm first initiated a position in Taiwan Semiconductor during the second quarter of 2020 and sold out 10% of the position during the December quarter. Shares of Taiwan Semiconductor are up 114% in the past four quarters.

In the Q4 investor letter, Bonsai Partners highlighted a few stocks and Taiwan Semiconductor is one of them. Here is what Bonsai Partners stated:

“Taiwan Semiconductor is the world’s largest outsourced foundry of logic semiconductor chips. TSMC’s shares appreciated 34.5% during the quarter. Taiwan Semiconductor continues to see unprecedented demand, albeit at a slightly less rapid growth rate than earlier in 2020. At the time of writing, TSMC announced strong fourth-quarter results and staggering growth in their expected capital expenditures for 2021 – growing from $17B in 2020 to $25B to $28B in 2021. Forward-looking capital expenditures are the key leading indicator of their medium-term growth rate expectations, and I expect TSMC management will continue to earn excellent returns on these colossal investments.

TSMC’s capital expenditure growth is likely due to investment in their new U.S. manufacturing footprint, rapid investment in their cutting edge process technology, as well as generally high levels of customer demand. Lately, we’ve seen semiconductor shortages in some of their less advanced process technologies, emphasizing the current state of the semiconductor supply-demand imbalance.”