US-China Semiconductor War: 5 Stocks to Watch

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

Number of Hedge Fund Holders: 72

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a semiconductors company that manufactures, packages, tests, and sells integrated circuits and other devices. The company operates in Taiwan, China, Europe, the Middle East, Africa, Japan, the US, and internationally.

Daiwa’s Rick Hsu upgraded shares of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) to Buy from Outperform on September 14.

With Sino-American tensions in the semiconductor space rising ever higher, the US Commerce Department has continued issuing new export rules to block semiconductor shipments. One such export rule is targeting shipments to Huawei, due to which Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) had to halt orders for Huawei’s HiSilicon unit this May. The company is being impacted by the US-China semiconductor war in multiple ways.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was found among the 13F holdings of 72 hedge funds in the second quarter. Their total stake value was $9.2 billion.

Mawer Investment Management, an asset management company, mentioned Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its second quarter 2022 investor letter. Here’s what the firm said:

“More recently, as concerns about the economic outlook have grown, it is no longer just inflationary concerns and discount rate considerations that are impacting stock prices. Given an increasing probability of a recession, stock prices declined for holdings such as Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), a business where end market demand could wane in a recessionary environment, and Ashtead Group, an economically sensitive construction equipment rental company. In both of these cases the pullback is due less from recent results, and more from uncertainty in the economic outlook. More cyclical businesses such as those within metals and mining also experienced sharp declines over the second quarter. Our general underweight exposure to such materials businesses, which we believe are typically less competitively advantaged, had a positive impact on relative performance.”