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We recently published a list of Buy The Dip On These 10 Semiconductor Stocks Tumbling On China H20 Chip Sale Ban. In this article, we are going to take a look at where aiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stands against other semiconductor stocks tumbling on China H20 chip sale ban.
Semiconductor manufacturers are at the forefront of the technological battle, especially in the context of China’s rapid tech developments. One would have thought President Trump would take it easy on the chipmakers owing to their critical position in the US and global tech infrastructure.
However, investors are now finding out that semi stocks aren’t immune to tariffs, with the latest round of tariffs expected to cost manufacturers around $1 billion. This cost will be incurred through lost sales, increased regulatory compliance, and elevated supply chain costs.
Uncertainty regarding the exact details of the tariffs continues to cause chaos in the market. Chip stocks are sliding as the leading chipmaker, led by Jensen Huang, finds its H20 chips banned from export to China. As the leading chipmaker tries to steer its way out of the crisis, other companies that rely on this giant for business are also trying to figure out what to do.
We decided to take a look at such stocks and see if they offer value. Remember that the H20 chips were made specifically for China, and a ban on selling them is only a temporary headwind, not something that threatens the company’s moat.
To come up with the list of semiconductor stocks worth buying on the China H20 chip sale ban, we considered stocks that are an integral part of the semiconductor supply chain and ranked them by hedge fund interest in their stocks.
A close-up of a complex network of integrated circuits used in logic semiconductors.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 186
Taiwan Semiconductor Manufacturing is a well-known global supplier of semiconductor equipment based in Taiwan. The company benefits directly from semiconductor technological innovation, as many companies use its foundry for manufacturing their chips. The stock is taking a hit after news of H20 chip sales restrictions by the US government.
Amid this negativity, there is one positive for the company that investors may have missed. AMD recently announced it will start producing some of its latest chip designs at TSM’s Arizona factory. Bagging such a big client means a lot for the company, especially as it ensures the company can keep its clientele without having to worry about geopolitical issues in Taiwan.