Taiwan Semiconductor…Another Derivative Play On Apple

Taiwan Semiconductor Manufacturing Company Limited (TSM), together with its subsidiaries, engages in manufacturing, selling, packaging, testing, and computer-aided design of integrated circuits and other semiconductor devices. The company manufactures masks and electronic spare parts; researches, develops, designs, manufactures, sells, packages, and tests color filters; and offers customer and engineering support services.

(TSM) is the world’s largest manufacturer of semiconductors.  TSM has been involved with chip design since the 1980s and today produces chips for some of the largest clients in the world. 

One such company is Apple.  TMS produces chips for Apple and gets 20% of its sales from Apple.

Two months ago Apple reportedly boosted component orders for the iPhone 11.  In particular, Apple bumped up orders for the $699 iPhone 11 and the $999 iPhone 11 Pro.  Some analysts are thinking Apple can sell up to 185 million iPhone 11s.   In addition, according to one analyst, Apple AirPods are seeing a surge of demand and could face holiday shortage.

Are you connecting the dots yet?

Apple (AAPL) iPhone chip supplier Taiwan Semiconductor Manufacturing (TSM) saw healthy sales growth in November thanks to strong demand for smartphone processors. Taiwan Semiconductor stock spiked to a record high on the news Thursday.

Taiwan Semi reported revenue of $3.54 billion in November. Sales rose 1.7% from the previous month and popped 9.7% year over year in local currency.

“We think this is largely due to smartphones (seasonal ramp) along with a recovery in data center chips,” RBC Capital Markets analyst Mitch Steves said in a report to clients


The chart suggests to look for a pull back to go long near the $52 level.

Another derivative play on Apple is Qualcomm.  Qualcomm Incorporated designs, develops, manufactures, and markets digital communication products worldwide and the company happens to be right in the center of 5G.

Qualcomm just announced their Snapdragon 865 5G chip which is capable of processing 2 gigapixels per second while delivering speeds of up to 7.5Gbps 5G connectivity.

Apple has plans on selling four new iPhones next year that could all be compatible with ultra-fast 5G wireless networks.

The chart suggests Qualcomm will continue to move higher to at least the $100 level.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Two Minute Crypto – Deciphering China’s Blockchain Play – Part 5 of 5

Please click the link below to listen to the 66th episode of my weekly crypto podcast ‘Two Minute Crypto.’ These are intended to be short, single-topic ramblings on some aspect of the cryptosphere. Consider dropping a like and or a review on iTunes or Podbean if you enjoy the podcast. Comments and critiques welcome.

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Deciphering China’s Blockchain Play – Part 5 of 5

Welcome to Two Minute Crypto. This episode wraps up the China Blockchain Series by examining the risk-reward investment scenarios now on offer.

Despite the undeniable importance of the Chinese Communist Parties’ enthusiasm for blockchain it, in fact, offers very little long-term upside for the typical investor.

A caveat -if you happen to be a mainland Chinese investor with ties to the government – then the future is very bright indeed. For the rest – not so much. There are many hundreds of blockchain projects currently underway in China – over 100 in Hainan province alone. How many of these are likely to accrue long-term value? Very few indeed – even in the most permissive and supportive environment the majority of start-ups fail. As 2017’s ICO phase clearly demonstrated the failure rate for crypto-related endeavours is even higher than that for other tech-related projects. Add to this the immense difficulty of accessing reliable information on China-based projects. A typical western investor simply has no idea what is ‘true’ when it comes to local chains. Twitter personalities and thirdhand reports make terrible investment advisors. Finally, throw an authoritarian regime into the mix. A government that can and will do as it pleases – anointing winners and dooming all others and the futility of picking Chinese crypto winners should be readily apparent.

Nonetheless, a tangible investment opportunity does exist here but it lies with projects that benefit by comparison with state-sanctioned chains. Bitcoin is an obvious example. Over the next few years, the reality of blockchain as a tool of state control and coercion will likely serve to highlight the liberating benefits of truly decentralized systems. Wall Street may care not a whit for liberty but they certainly embrace opportunity and decentralized financial instruments fit the bill perfectly.

Another though much difficult to identify opportunity lies with chains that successfully master interoperability – allowing them to do business across borders while remaining complaint with varying legal requirements. Such projects may or may not be decentralized but facilitating access to markets should bring value to those chains that achieve this at scale. Nuls, Chainlink, Polkadot, and Quant are some of the current leaders in this area though it’s far from clear whether any of them will gain meaningful traction over the coming years.

Finally, there are potential swing trade opportunities in the short term. Tokens with reasonable liquidity such as NEO and ONT may offer substantial upside as China moves to implement blockchain more broadly. This process may temporarily lift all boats as it were. However, there is no reason whatsoever to believe that well-established chains like NEO and Ontology will be adopted. From a risk/reward perspective, a targeted exit point in under a year seems optimal. Wait too long and you could see the entire position collapse overnight. Swing trading, however, is much more suited to folks who are already experienced day traders and therefore not a viable option for most retail investors who are exceedingly likely to move the goalposts once actually in a position.

In summary – China matters. The next few years will see it take centre stage as the CCP rolls out its version of crypto. Many will declare that the Beijing model is the only viable at-scale implementation of blockchain. They will be entirely wrong but it may take years for that to become clear. Over a long enough horizon – the centralized, state-supervised model of crypto embodied by China and a soon to follow slew of authoritarian regimes will end up being a profound catalyst for the widespread adoption of decentralized chains – and here is where the true investment potential lies.

Thanks for listening.

Series Links

Two Minute Crypto – Deciphering China’s Blockchain Play – Part 1 of 5

Two Minute Crypto – Deciphering China’s Blockchain Play – Part 2 of 5

Two Minute Crypto – Deciphering China’s Blockchain Play – Part 3 of 5

Two Minute Crypto – Deciphering China’s Blockchain Play – Part 4 of 5