Tim Culpan from Bloomberg Gadfly, joined us again to discuss the TSMC Group, where they are leading semiconductor foundries for many major companies from Apple, Qualcomm and Intel. We began our conversation with the recent happenings with Foxconn’s acquisition of Sharp and whether the acquisition will work given Foxconn’s early history with Innolux and the discussion on how Taiwanese technology companies are leading the Asia’s best performing tech stocks. Then we dived deep into the TSMC group and dissected the management team, their core competencies and footprint across Asia. Last but not least, we also discussed how dependent is the TSMC group is to Apple and where the company is heading for the next 5 years.
Here are the interesting show notes and links to the discussion (with time-stamps included):
- Quick intro to Tim Culpan (@tculpan, LinkedIn, Bloomberg), Technology Columnist for Bloomberg Gadfly.
- Tim have moved from a reporter role to a columnist writing your opinions and perspectives in Bloomberg Gadfly. What does his new role entail? [0:50]
- Recent happenings with Foxconn Group [1:43]
- What is the story on the Foxconn group’s offer to acquire Sharp for US$5.1B? Is the deal stalling or happening based on observations in the market? Is Sharp likely to sell their LCD business to Foxconn? (Note that the conversation happened before Foxconn’s announcement on the following day and the current deal hanging in the balance.) [1:55]
- What is Foxconn’s history in acquisitions based on their Innolux experience? [2:54]
- Is culture going to be an issue for Foxconn’s acquisition of Sharp? [5:10]
- Perspectives on Taiwanese tech stocks [6:55]
- Asia’s Dowdy Winners: Recently, Asia’s best performing tech stocks are all Taiwanese, what’s the reason behind this? Are they limited to the hardware and manufacturing business? [7:00]
- Are these tech stocks performing well due to Apple’s iPhones? [9:10]
- Taiwan Semiconductor Manufacturing Company (or TSMC Group) (Wikipedia, Bloomberg, Google Finance)
- Information on TSMC: Dedicated Integrated Circuits Foundry, dual listed in Taiwan Stock Exchange & NYSE. Market Cap ~ US$109B in NYSE, more than 35K employees. Headquarted in Hsinchu, Taiwan, founded in 1987. Other than their semiconductor business, they are into lighting & solar energy related industries.
- What is the mission and vision of the TSMC group? What is it set up to do from the very start? [10:25]
- Who are the key executives of TSMC? Do they have any founders from the start? (Note: They have an executive chairman Morris Chang with two co-CEOs, Mark Liu & C C Wei and what do both of them do?) [12:40]
- For TSMC, strategy is execution and execution is strategy. [14:30]
- What are the core competencies of TSMC in technology & semiconductor foundries? Which part of the chain do they operate in with chip makers such as Qualcomm? [15:34]
- Who are the customers of TSMC? How does the company generate revenue? [18:10]
- Are they customised to the business models of their customers? [18:57]
- Do TSMC has an open platform given that they have deep experience with many clients in the semiconductors industry? [21:20]
- TSMC and Apple:
- When we talk about TSMC, we inevitably have Apple in our mind, is the company totally captive to Apple as their main customer or do they have other major customers? Recent rumors pointed to TSMC will gain full control of the A10 chip for Apple iPhone 7, does that mean that Apple will prefer them over Samsung? For every iPhone sold, TSMC gain US$8-$15 per phone in revenue. [23:30]
- What is the footprint of TSMC across the world? Where are their fabs located in? [25:00]
- What’s TSMC’s working relationship with ARM? [26:10]
- With the recent decline in sales for TSMC for two consecutive quarters, does the company making any moves to other verticals? [27:09]
- Has TSMC group done any major acquisitions given that their core competency is in technology development? [28:47]
- In TSMC’s perspective, what are their major worries for the next 5 years? Two broad categories for TSMC: cars and Internet of Things. [30:31]
The show is hosted by Bernard Leong (@bleongcw) and are sponsored by Ideal Workspace (Twitter, Facebook and LinkedIn) with their new Aspirus Desk on Indiegogo (Twitter, Facebook, Medium) and Linkcious (and check out their other product, Chiibi). Also check out Ideal Workspace’s new standing desk, Aspirus and sign up for their mailing list.