GregTheAnalyst
Independent Investor, Macro/Micro & Technical Analysis
TSMC may face its 2000 Cisco moment if the 10-year/3-month Treasury spread keeps steepening instead of crashing back into inversion. If TSMC's strong-demand view is right, the spread should reinvert to extend the cycle, as in 2022; instead it is approaching +80bp after un-inverting, which signals it's really time. x.com x.comÂ
TSMC may lose pricing power as performance gains shift from shrinking transistors to stacking, interconnects and optics, while logic folding could make older processes competitive. Despite strong leading-edge demand, investors may overestimate the profit share its node leadership can retain. Its cautious expansion and past reluctance toward advanced packaging suggest a risk-averse culture that protects returns but could leave it late to disruptive technologies and key customers. x.comÂ
TSMC's failure to prioritize Apple marks an irreversible turning point that the market will take a long time to price, even though near-term results won't be hurt. Apple paid development costs for 2nm and saw itself as a de facto shareholder, yet got no priority supply. TSMC is not expanding capacity and told Google to go through back-end partners. That treatment drives customers like Apple toward Intel, and years from now CC Wei's stance will be looked back on with regret. x.com x.com x.com … Show more
TSMC trades at its historical average valuation in the midst of its industry's largest investment cycle. The world's most important company is at 17.5x forward earnings, in line with its 10-year average. x.comÂ
Falling Treasury yields reinforce the growth-scare thesis and mark a bullish turn for long-dated Treasuries. The 10-year yield is breaking below 5% as TLT rallies. x.comÂ
TSMC's AI growth still faces margin pressure from overseas fab expansion and a faster A14 ramp for mobile customers facing 2nm SoC challenges. 3Q gross margin of 66.4% missed expectations, and the 4Q guide is softer at 65-67%; margins are expected to remain largely flat through 2027-28 despite projected 39% revenue growth in 2027. Hold; target nudged to NT$2,999 at 20x 2027 earnings. x.com x.com x.comÂ
Taiwan Semiconductor's above-average inflows and potential capitulation at the recent low add to its bullish setup. The stock has moved cleanly off the STL and out of the pink zone. x.comÂ
TSMC's shifting cost structure is pressuring gross margin despite revenue and EPS beats. TSMC reported Q3 gross margin of 66.4%, down from 67.7% in Q2, and another decline is guided next quarter; Arizona is expected to drag gross margin by 2-4%. TSMC is checking AI data-center progress as it plans wafer capacity, while reiterating long-term AI demand strength. Price hikes may be next, given management's commitment to protect shareholder interests. x.com x.comÂ
TSMC's growth is constrained by capacity, so its growth rate is already known and priced in. x.comÂ
TSMC has only upside from here because even the lowest post-earnings 12-month analyst target is $440, above its $422 share price. The average target is $586.92 and the highest is $1,000. x.comÂ
TSMC looks like it has put in a blowoff top, rising even on an announcement that it cannot afford new ASML equipment. x.comÂ
