Why TSM’s Stock Forecast Looks Favorable For The Long-Term Holder

TSM Stock Forecast

TSM is the ticker symbol for the Taiwan Semiconductor Manufacturing Company Limited, which trades on the New York Stock Exchange.  The company manufactures Wafer Semiconductors in 12, 8, and 6 inch sizes, which are used in products worldwide such as; mobile devices, automotive and consumer electronics, and IoT (the Internet of Things) to name a few.

The company is based in Hsinchu Science Park,Taiwan, where all the manufacturing of it’s 12 and 6 inch Wafer’s take place.  They currently have a small presence in the US, with a manufacturing plant in Camas, Washington producing 8 inch Wafer Semiconductors and doing testing and analysis.

But, things are about to get really ‘busting’ (as my daughter says) for the Semiconductor Industry, and it’s why I believe the Taiwan Semiconductor Stock Forecast looks really favorable for long-term holders.

FULL DISCLOSURE:  I am a shareholder in TSM Stock.  The views expressed with regards to TSM or any other stock, mutual fund, or ETF on this site are personal opinions only, and should not be construed as financial advice.  Please consult your financial advisor, mentor, or whomever you trust for financial advice before taking a position in TSM or any other company or fund discussed on this site.

First off, here are some technical perspectives which indicate Taiwan Semiconductor’s Stock forecast looks favorable at this time.

TSM is currently trading (at the time of this writing) 9.89% below its 200-day moving average, and 16.40% below it’s 50-day moving average.

TSM is trading with an RSI Index of 46.  A stock is generally considered ‘oversold’ when an RSI reaches 30, so we are not there yet, but if it continues its current trend, it may indeed fall below 30.

TSM Stock Forecast

The Trendline for TSM is most certainly in a bearish (downward) pattern.  There appears to be resistance at 75.29, and if it can close above this price, it may signal a trend reversal. 

For the trailing 12 months, TSM has a Free Cash-Flow per Share multiple of $3.40.  Compare this with rival Intel whose most recent report back in September showed a loss of $-3.24, and it’s almost like comparing apples and doughnuts.  

Here are some Macro perspectives that make me think TSM’s stock forecast looks favorable.

The desire to manufacture semiconductor chips in the United States is beyond immense, it’s actually radicalized ambition.  Due to it’s proximity and ongoing strife with Mainland China, Taiwan Semiconductor wants to develop a more ‘diversified’ option.  

So, as a hedge to Mainland China’s ‘Stalinistic Aggression’ they’re making one of the largest foreign investments in the United States and THE largest foreign investment in the state of Arizona, by building a $40 Billion chip manufacturing plant.

And Apple’s Tim Cook is a fan.  He says Apple will be buying chips made in Arizona once they become available in 2024. 

iPhones with chips, ‘made in America’?  It’s a sheer Gamechanger!

The plants will be able to produce 4-nanometer and 3-nanometer chips, which are used in advanced processors such as Apple’s A-series (phones) and M-series (computers) as well as Nvidia’s graphics processors.

The potential backlash from Communist China due to trade implications if the U.S. gains control of the Chip Market, may be rather swift.  The outcome of this has yet to reveal itself to the masses.

Which is why I’m not overstating the importance of the Arizona Plant;  In fact, the entire world save for Mainland China, may ultimately depend on the success of TSM’s production in the Desert. 

When you have everything from refrigerators, to vehicles, to cell phones requiring a computer chip, and the demand is global, the need to have them built under a free society is monumentally important.

Taiwan Semiconductor in the news

TSM held a ceremony on December 29th to celebrate the mass production of it’s 3 nanometer process technology.  According to Focus Taiwan, both Apple and Intel have already placed massive orders for this new technology.

The Chips Act will establish a semiconductor investment tax credit of nearly 24 Billion by 2027 in an effort to spur private investment.

However, there are concerns brewing within Taiwan’s ruling class and its academic elites that the move to the U.S. may be de-Taiwanizing the semiconductor company. 

But, Dr. Sun Ming-te, the director of the Taiwan Institute of Economic Research, claims it’s actually necessary to ‘Attack’ rivals such as Intel and Samsung.

We should take Ming-te’s ‘threat’ with a grain of salt, as Dr. Sun may be trying to sugar-coat any possible ‘negative implications’ the opening of the Arizona Plant could have on the Taiwanese economy.  

In conclusion

TSM’s Stock forecast appears to be getting brighter with each steel I-beam being welded together in the Desert .  The Plant in Arizona is expected to produce upwards of 600,000 wafers per year.  All-the-while, Maricopa County will be the beneficiary of all things related to the 10,000 high-paying tech jobs the new TSM plant will create.

This is why I’m a long-term holder of TSM Stock.  And, while I wait patiently for the price to climb, I’ll enjoy collecting quarterly dividend payments for my troubles.  Should you consider TSM for your portfolio?   





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