Stock Deep Dive: The Most Important Company In The World (Right Now)

Published December 30th, 2023

Hi Everyone 👋,

It’s time for our GRIT Monthly Stock Deep Dive! If this company were to halt its operations, the global electronic supply chain would crumble. Not kidding! 😳 This is a must-read.

Before we get into it, here is what we added to GRIT VIP 🚀 this month! 👇

Resources: 📈

1. GRIT Beginner Guide to Investing

2. GRIT Investor Book List (this is the best list we’ve made so far!)

Articles: 📚

1. 6 Crucial Investing Principles

2. 7 Reasons a Stock Falls After Earnings

3. How Raising Rates Control Inflation

4. 7 Reasons Why Stock Price May Change

5. The Key to Identifying Moats

Live Investor Portfolios: 💰

1. Bill Ackman

2. Carl Icahn

3. David Tepper

4. Mohnish Pabrai

5. George Soros

So much more is coming to GRIT VIP in the next few weeks. Stay tuned!

Stock Deep Dive: Taiwan Semiconductor Manufacturing Company (TSMC-US, $540B)

What if I told you that if this one company ceased operations, the entire global electronic supply chain would collapse?

That company exists. It’s also called Taiwan Semiconductor Manufacturing Company (TSMC), and TSMC makes over 90% of the world’s most advanced semiconductors. Sure, the chips themselves do not make an outsized contribution to overall GDP, but the impact is enormous when you add up everything that MUST have a component built by TSMC. Everything, from microwaves to smartphones to automobiles, is powered by a chip that TSMC manufactured.

That is why TSMC is arguably one of the most important companies today, as data has already become the new oil. Students of history will know that wars have been fought over resources. This story is no different, with a complex geopolitical layer involved.

While Nvidia is the high-flying, shiny stock that has caught the eye of investors, Buffett fans will love this name after they start to understand just how much of a moat TSMC has.

But there is a caveat - a geopolitical one. We’ll cover this near the end as well!

Let’s dive into this absolute behemoth in the semi-industry without further ado.

• Overview 👉 What Do They Do?

• Value Proposition 👉 How Do They Win?

• Revenue Streams 👉 How Do They Make Money?

• Supply Chain 👉 Semi Industry Map + Supplier/Buyer Network

• By The Numbers 👉 Key Metrics

• Geopolitics 👉 US vs. China

• Risks 👉 Potential Pitfalls

Overview 👉 What Do They Do?

Founded by Morris Chang in 1987, TSMC was the first pure-play foundry company and is the most dominant by a large margin today.

A foundry is a semiconductor manufacturer that makes chips for other companies and is commonly called a “fab.”

Other companies take what TSMC manufactures and create their designs on top of this. These are called “fabless” companies and do not manufacture the chip itself. Hundreds of fabless semi-companies exist, such as Qualcomm, Nvidia, and Apple.

TSMC pioneered the pure-play foundry business model, exclusively focusing on manufacturing its customers’ products. By choosing not to design, manufacture, or market any semiconductor products under its name, the company ensures that it never competes with its customers.

In 2022, the Company manufactured 12,698 products using 288 distinct technologies for 532 customers.

TSMC’s founding principle is to enable its customers' success, acting as the bedrock on which the world’s most advanced technology is built.

Subscribe to GRIT Premium to read the rest.