A support level has formed in the chart of Taiwan Semiconductor Manufacturing Company (TSM). If the stock falls through this level, a breakdown is expected to occur. Read more to learn how to profit from this trading opportunity.Taiwan Semiconductor Manufacturing Company (TSM) is the world's largest dedicated chip foundry, with over 58% market share. Many leading fabless chip makers, including Qualcomm (NASDAQ:QCOM) and Advanced Micro Devices (NASDAQ:AMD) rely on TSM to manufacture their smallest and most powerful chips.
The company has been benefiting from a huge appetite for new chips and with the global chip shortage expected to continue for another year, that appetite should only grow. TSM has also gotten a boost from automakers as 49% of its sales went to automakers, with the segment rising 87% year-over-year in the most recent quarter.
While the company has $5 billion in short term debt, its cash balance of $31.5 billion is more than enough to cover that debt, leading to a Quality Grade of B in our POWR Ratings system. In terms of growth, EPS was up 19.2% year over year in the second quarter and is expected to rise 18% for the year.