TSMC bottleneck supports sustainable bull market
The thesis argues that TSMC's position as a structural bottleneck in logic chips makes its bull market far more sustainable than the memory chip sector.
The argument
The guest argued that unlike commoditized DRAM, advanced logic chips do not face daily spot price volatility, and TSMC has not expanded capacity aggressively enough to destroy its pricing power.
The thesis, stress-tested
✓ What validates it
- ✓TSMC maintains high utilization rates and pricing power in upcoming quarters
- ✓Competitors fail to replicate TSMC's advanced node yields
▸ Risks discussed
- ▸Geopolitical escalation or invasion risk in Taiwan
- ▸Broader retail speculation in the Taiwanese market leading to a sharp correction
Hear it yourself
"So we're I feel like we're now I wouldn't say Asia Pacific is is particularly speculative as a whole. There are plenty of cheap companies, but these parts of the market, I have not seen such speculations since 2021, the COVID boom. That was also a period of, you know, extreme speculation in South Korea. Well, I know you have opinions about the index construction in Asia, but it's really the best thing we have as a measurement for these markets. And, you are correct. The the EWI, which I like because it you can do total return and it's in dollars. The EWI iShares MSCI Korea ETF is up 255%, over one year, and Taiwan is up a measly a 112% over that same period of time."
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