Date: November 29, 2022
Warren Buffett’s Berkshire Hathaway recently disclosed taking a $4 billion stake in Taiwan Semiconductor, popularly known is TSMC. Many in investing circles are treating this as Warren Buffett’s seal of approval and going bullish for this stock.
If you are contemplating whether TSMC is the right stock for your portfolio or not, let me tell you why TSMC stock deserves a serious look, and one risk you absolutely should consider before making this investment.
Why One Should Consider Buying Taiwan Semiconductor (TSMC) Stock?
With more than 50% market share in chip manufacturing and extremely strong financials beating guidance numbers on all fronts, Taiwan Semiconductor dominates this growing industry. A recent study by McKinsey suggests that the demand for semiconductors will grow by another $400 billion before 2030, making it a trillion-dollar industry. Assuming TSMC is able to maintain its competitive edge, this could translate into meaningful growth for this company.
Risk To Consider
Even though TSMC has manufacturing facilities across the globe, Taiwan is its core manufacturing hub. Tensions between People’s Republic of China and Taiwan have recently been on an escalation path. If these tensions escalate to a serious conflict, it would be detrimental to TSMC stock, and the global semiconductor supply. That is one risk that you cannot overlook when making an investment decision for TSMC.
Let me know your thoughts on this subject, by commenting on the above video!
