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Taiwan Semiconductor stock rises on bullish call for chip makers

Yahoo Finance Live anchors discuss Morgan Stanley’s decision to mark Taiwan Semiconductor a top pick for investors.

Video Transcript

BRAD SMITH: And finally here, let's take a look at the chip sector. Lock in on shares of Taiwan Semiconductor Manufacturing Company, that's ticker symbol TSM. And we've got it there up on the screen. Yep, we're up by about 1% here. I had to pause for a second just to make sure it was still up. I mean, are you going to--

BRIAN SOZZI: It's a bad luck. Looks like a Wordle or a crossword puzzle, right?

BRAD SMITH: You're going to do like the social media person that started to redesign all the logos.

BRIAN SOZZI: TSMC, send me an email.

BRAD SMITH: All right. Done deal. After Morgan Stanley projected a return to growth for the semiconductor industry by the second half of 2023, the entire chip space really took note of that. But TSM, of course, you're seeing that on the screen, up by about 1.1%. They named TSMC as one of its top picks, calling it an enabler of future technology.

BRIAN SOZZI: You know what that is? I just realized. That is a wafer. So that's a knock on me. I did not realize a wafer. One of our producers may be calling out that it could be a disco ball. But I think it's a wafer.

But this is a bold call by Morgan Stanley. They're essentially saying the next six months may stink, but at some point later on in 2023, we might get a rebound in this sector. So buy some of these stocks now, like TSMC. It's a tough call. It's a tough call considering some of these companies are going to report probably dreadful earnings in a couple of weeks and that might hit the stocks further.

BRAD SMITH: OK, so now we've moved into this as a brilliant logo then, if it's nanometer.

[INTERPOSING VOICES]

BRIAN SOZZI: That's a wafer.

[INTERPOSING VOICES]

BRAD SMITH: Yes. And it's one of the only fabrication processes in the world. And that's why we're seeing so much of the production, so much of the breaking down-- breaking ground on these new factories is because there needs to be more fabrication of chips to really meet the demand across automotives, across handset devices, and all of the consumer tech that makes it into our homes.

It was really interesting. I think they didn't-- they spared nothing in just giving them high praise that said that it's Asia's most valuable listed corporation. We see that over the course of these past two years how much it has been relied on. And now it's really the differentiation, or at least the division of reliance on TSMC that the rest of the world is trying to kind of ramp up at this point.

BRIAN SOZZI: Yeah, you're seeing all of these chip companies, we'll talk about it later in the show, starting to finally build more production here in the US. It's great. It's great to see it. Long overdue.