tsmc's dividend vs. apple's stock: analyst urges rethink for berkshire hathaway

2025-05-02 tsmc

Taipei, Friday, 2 May 2025.
a taiwanese analyst is making waves by suggesting berkshire hathaway should favor tsmc over apple. lu hsing-chih points to apple’s less-than-stellar financial reports and geopolitical risks. he argues tsmc should significantly boost its quarterly dividend to ntd 10 per share. this move could greatly improve shareholder value and possibly sway berkshire hathaway’s investment strategy. lu emphasizes tsmc’s strong cash position, with its cash reserves hitting over ntd 90 per share in the first quarter of 2025.

analyst’s rationale

Lu Hsing-chih’s analysis contrasts starkly with apple’s recent performance [1]. He notes apple’s hardware innovation is lacking and its valuation is excessively high [1]. Geopolitical factors, potential tariffs, and the push for domestic manufacturing in the us further cloud apple’s prospects [1]. Tsmc, on the other hand, has mitigated these risks by investing $165 billion usd in overseas facilities, effectively securing a ‘免死金牌’ (protection) against these challenges [1].

tsmc’s financial strength

Tsmc’s robust financial health supports lu’s call for a dividend hike [1]. The company’s per-share cash position has steadily increased, exceeding ntd 90 in the first quarter of 2025, compared to ntd 82 in 2024, ntd 57 in 2023, and ntd 52 in 2022 [1]. Concurrently, tsmc has reduced its reliance on government bonds and corporate debt, improving its debt-to-equity ratios [1]. This financial prudence, coupled with strong cash flow, makes a higher dividend payout feasible [1].

comparative valuation metrics

Lu provides a comparative snapshot of valuation metrics as of december 31, 2024, highlighting tsmc’s relative attractiveness [1]. Tsmc exhibits a lower price-to-earnings ratio (p/e) of 24 compared to apple’s 34 [1]. Furthermore, tsmc’s enterprise value to ebitda stands at 13, significantly lower than apple’s 25 [1]. Other metrics such as price-to-sales and price-to-free cash flow also indicate tsmc’s superior valuation [1].

market trends and tsmc’s focus

Taiwan’s stock market is currently focused on us tech earnings, economic data, and potential tariff policies [3]. Following a market rebound that pushed the taiex above 20,700 points, interest in bargain-hunting for zero-dividend stocks has cooled [3]. Tsmc remains a focal point in the zero-dividend market, alongside high-dividend etfs [3]. Foreign investors have shown strong interest in tsmc, with net buys of 25,711 shares amidst a strong appreciation of the new taiwan dollar [5].

ai and semiconductor leadership

The ai sector is significantly impacting tsmc’s prospects [6]. Experts predict the overall semiconductor market will grow by over 15% in 2025, driven by ai-related demand for advanced chip manufacturing and high-bandwidth memory [6]. Tsmc’s dominance in the global foundry market is evident, capturing 95.6% of revenue among the top ten foundries in the fourth quarter of 2024, with a market share of 67.1% [6]. This leadership position in ai-related semiconductor manufacturing underscores tsmc’s strategic importance [6].

Bronnen

Stock Dividend Investment Strategy