- Needham analyst Charles Shi attended the Samsung Electronics Co., Ltd. SSNLF Samsung Foundry Forum in the U.S. on October 3 and came away with a more balanced view of the two foundry leaders.
- He found Samsung Foundry less advanced on the leading edge than it appears, and Taiwan Semiconductor Manufacturing Company Ltd's TSM lead on 5, 4, and 3nm remains largely unchallenged.
- He noted Samsung Foundry's strength on the sub-leading edge, namely 8 and 7nm, may be underappreciated, and TSMC's 7nm under-utilization may be more than just a cyclical issue.
- The analysis did not alter its optimistic view on TSMC (Buy, Conviction List).
- While Samsung Foundry seems to be losing its edge in its competition with TSMC, he thinks the company is making up the loss on the leading edge with notable successes on the sub-leading edge.
- He was bullish on TSMC overall due to expanding technology lead at 5nm and 3nm nodes and can see Apple Inc AAPL designing Qualcomm Inc QCOM RF chips out and adopting TSMC's N6RF could assist in TSMC's 7nm recovery. However, it may be premature to count Samsung Foundry out today.
- Still, he thinks bulls may benefit from a holistic view of TSMC's relative strengths and weaknesses as he braces for TSMC's first guide down this cycle when it reports 4Q22 earnings in January.
- Price Action: TSM shares traded lower by 0.78% at $73.26 on the last check Monday.
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