Jack Linnartz ’25 pitched Taiwan Semiconductor Manufacturing Company (NYSE: TSM) on April 7, 2025. TSMC is the world’s leading pure-play foundry, manufacturing the most advanced semiconductors for Apple, Nvidia, AMD, and other top fabless companies. It sits at the center of global computing, with unmatched scale, node leadership, and packaging innovation critical to AI, smartphones, and HPC.
Jack’s thesis centered on a market dislocation where TSMC’s evolution into a natural monopoly at the leading edge remained underappreciated, creating unrecognized upside and durable pricing power not yet reflected in the valuation. He highlighted TSMC’s positioning to three structural tailwinds: (1) semiconductor TAM expansion to $1 trillion by 2030, (2) the continued industry shift from IDMs to the fabless-foundry model, and (3) accelerating share gains in advanced nodes. He emphasized TSMC’s expanding competitive moat, anchored by its neutral pure-play model, industry best yields, capex scale, and deep ecosystem integration. Together, these form a flywheel of customer entrenchment and execution that competitors like Samsung and Intel have failed to replicate. Lastly, Jack conducted a bottoms-up assessment of customer-level revenue exposure and found that the market overstated TSMC’s U.S. market risk. While the modeled earnings impact from tariffs was significant, the downside scenario was effectively priced in, creating an asymmetric return profile and attractive entry point for the fund.
SMIF voted to purchase approximately $97,000 of TSM, funded through the partial sale of AAPL and XLK.
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