Intermede Investment Partners Reduces Stake in Taiwan Semiconductor Manufacturing Company Limited

Intermede Investment Partners Ltd has reduced its stake in Taiwan Semiconductor Manufacturing Company Limited (TSMC) by 48,333 shares. TSMC plans to phase out its 6-inch wafer manufacturing and has approved a $10 billion capital increase for its subsidiary. The company reported a 22.5% revenue increase in July 2025 and maintains a 'Buy' rating with a target price of $220. Analysts cite robust financial performance and strategic positioning as key drivers of the stock's overall score.

Taiwan Semiconductor Manufacturing Company Limited (TSMC) has recently undertaken significant strategic moves that are reshaping its future trajectory. The company has announced plans to phase out its 6-inch wafer production over the next two years and approved a $10 billion capital increase for its subsidiary, TSMC Global. Additionally, Intermede Investment Partners Ltd has reduced its stake in TSMC by 48,333 shares. These developments come amidst robust financial performance and a strong focus on advanced semiconductor technologies.

Phase-Out of 6-Inch Wafer Production

TSMC has announced plans to phase out its 6-inch wafer production over the next two years. This decision follows a careful review of market conditions and aligns with the company's long-term strategy to optimize production efficiency [3]. TSMC will cease production at its Fab 2, which produces 6-inch wafers, in 2027, and will assist customers with transfers to other fabs. This shift is part of TSMC's broader strategy to focus on advanced nodes and high-margin applications, ensuring the company remains at the forefront of technological leadership.

Capital Increase for TSMC Global

TSMC has approved a $10 billion capital increase for its subsidiary, TSMC Global. This move is part of the company's broader strategy to fund its ongoing capital expenditure (CAPEX) and research and development (R&D) efforts. The company has experienced a 26% jump in July revenue, reaching NT$323.17 billion [2]. This significant revenue growth underscores TSMC's ability to generate robust returns on capital, with a return on equity (ROE) of 34.8% in Q2 2025 and a return on capital employed (ROCE) of 21.11% [2].

Stake Reduction by Intermede Investment Partners Ltd

Intermede Investment Partners Ltd has recently reduced its stake in TSMC by 48,333 shares. This move comes amidst robust financial performance reported by TSMC, which saw a 22.5% revenue increase in July 2025 compared to the previous month and a 25.8% increase from the previous year [1]. Despite mixed market sentiments and recent stock volatility, analysts maintain a 'Buy' rating with a target price of $220. The stock has experienced fluctuations, with prices ranging between $234.71 and $245.74, and a year-to-date price performance of 24.42% [3].

Geopolitical and Market Implications

TSMC's strategic moves also come amidst political signals suggesting that companies with substantial U.S. manufacturing investments, such as TSMC, are likely to be exempt from the proposed Section 232 semiconductor tariffs [1]. This reduces near-term downside risk and may enhance TSMC's competitive position relative to peers with smaller or no U.S. footprint. However, TSMC also faces risks such as rising energy costs, FX volatility, and potential overcapacity in the foundry sector. The company's disciplined approach to CAPEX and focus on high-margin AI/HPC applications mitigate these risks, ensuring its growth trajectory remains intact.

Conclusion

TSMC's strategic shift in wafer production, capital allocation, and operational efficiency is a testament to its visionary leadership. The company's ability to balance capital-intensive investments with operational efficiency and pricing power ensures it will outperform peers in both revenue growth and profitability. Investors should closely monitor TSMC's progress in these areas as it continues to shape the future of the semiconductor industry.

References:
[1] https://www.ainvest.com/news/guardcap-asset-management-reduces-stake-tsmc-key-insights-analyst-2508/
[2] https://www.ainvest.com/news/taiwan-semiconductor-manufacturing-company-issue-bonds-worth-nt-60-billion-2508/
[3] https://www.theglobeandmail.com/investing/markets/stocks/TSM/pressreleases/34194517/brandes-investment-partners-boosts-stake-in-tsmc/