In today's corner, Good shopping or goodbye, Dryden Pence, Chief Investment Officer of Pence Capital Management, discusses navigating stock selection within the semiconductor sector with Julie Hyman of Yahoo Finance. Pence shares his thoughts on why investors should avoid Intel (INTC) and consider adding Taiwan Semiconductor Manufacturing (TSM) to their portfolios.
Pence listed Taiwan Semiconductor Manufacturing as a buy, highlighting the company's position in the world of artificial intelligence (AI). He described Taiwan Semi as producing “very high value” chips, making it the “absolute choke point” in the industry. Pence believes that “no one can accomplish our long-term mission” without relying on Taiwan Semi's capabilities, going so far as to call the company the “most important” player in the field. This gives companies pricing power and the potential for “long-term excess returns.” Additionally, Pence highlighted Taiwan Semi's technological advantages over its competitors, describing the company as an “essential building block” in the future of AI.
In contrast, Pence advises investors to avoid Intel. He said Intel's once-dominant foundry business, which accounted for 61% of the market, had “dramatically declined” as traditional businesses “lost their appeal” and lacked meaningful innovation efforts. It pointed out. Pence said companies are reluctant to “disrupt what's working” because competitors are “years ahead” in terms of innovation, tight supply chains and surging demand. , explained that Intel's market share is declining as a result.
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Disclosure: Dryden Pence personally owns stock in TSMC.
Editor's note: This article was written by angel smith
