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Chip stocks on the rise: Is buying in still a smart move?
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$TSM $174.20 #1 BUY ON ANY DIP CANDIDATE.

$Taiwan Semiconductor(TSM.US)$ I'm expecting some market give back (3-4%???) over the next 2 weeks post Friday's triple witching, qtr end & index rebalancings. History shows that we see this before the Summer rally resumes to finally slow again in late July-Aug.

'25E P/E ON CURRENT CONSENSUS 21.8X = ~25% disc. to $SMH $SOX PEERS BUT CONSENSUS COULD BE LOW BY 25%.

DUE TO REPORT Q2 ON JULY 16TH

MULTIPLES ARE A FUNCTION OF GROWTH & MARGINS. WE ALL KNOW THE GROWTH SIDE OF THE STORY (April revenue + 59.6% y/y) BUT ARGUABLY THERE IS NO SEMI CO. BETTER POSITIONED TO FLEX ITS PRICING POWER.

Why margins $Taiwan Semiconductor(TSM.US)$ should increase... all roads lead to $TSM... price hikes advanced nodes unavoidable:
⭐Chip-on-wafer-on-substrate (CoWoS): is the biggest bottleneck in AI chips & $TSM has by far the most capacity. $TSM will see higher packaging & wafer revenue.
⭐3nm: Samsung's production hampered by yield and power efficiency issues. $TSM 20%+ better yields. Winning most key orders.
⭐Full utilization of N3 and N5, and favorable mix shift from N3B to N3E/P.
⭐Controls around 90% of the manufacturing of AI chips.
⭐One of the widest moat stocks in the market. It's the leader in a capital intensive industry and it is at least a generation ahead of its rivals.
⭐Step change ahead of competition re. 2nm (could see in '25) & ultimately 1nm.

The $165-$170 level looks very well supported both from a technical level as well as from an options flow perspective. Looking to build a position in this range ahead of earnings that could see a major re-rate ala $NVIDIA(NVDA.US)$ & $Broadcom(AVGO.US)$ of late.
$TSM $174.20 #1 BUY ON ANY DIP CANDIDATE.
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