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Today's big stories

TSMC raised its sales forecast for the year, as the chipmaker ramps up production for the auto industry
Goldman Sachs has laid out an “unusually attractive” investment opportunity, but you’ll need to be quick – Read Now
Fintech giant Revolut just became the most valuable UK startup following its latest fundraising round

Philanchipist

What’s Going On Here?

TSMC raised its sales forecast for the year on Thursday, as the world’s biggest contract chipmaker does what it can to help the supply-starved car industry.

What Does This Mean?

TSMC – which is seen as a bellwether for both chipmakers and the global economy as a whole – raised its revenue forecast for 2021, with the firm now expecting sales to grow more than 20% from last year. That probably has something to do with the ongoing chip shortage, which is playing right into suppliers’ hands as they race to fulfill a backlog of orders.

Not so much for carmakers, which have been at the back of the line for chips and forced to dial back production until they reach the front (or offer Big Tech money for the goods). But that could be about to change: TSMC told carmakers on Thursday to expect a sharp pickup in the next few weeks, with the firm forecasting its production of auto chips will climb 60% for the full year compared to 2020. That should help, but it’s no silver bullet: TSMC warned that supply will remain tight into 2022.

Why Should I Care?

Zooming in: Bow down to Apple.
TSMC’s improved sales forecast for 2021 might also have something to do with Apple: the chipmaker’s biggest customer is reportedly asking suppliers to help boost iPhone production by 20% this year to 90 million units (tweet this). Clearly Apple’s expecting strong demand for its upcoming 5G-enabled smartphones, and the tech giant knows only too well that mind control devices don’t build themselves.

The bigger picture: Carmakers roll with the punches.
The global chip shortage is denting carmakers’ sales, sure, but it’s also helping them increase their profit margins. That’s because a lot of them have pivoted: Daimler, for one, was focusing production on more profitable models last quarter, which was partly why it reported a jump in profit that blew past expectations on Thursday.

You might also like: Three visions of Apple’s future, and how each affects its valuation.

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2. Analyst Take

Goldman’s “Unusually Attractive” Earnings Opportunity

What’s Going On Here?

US earnings season kicked off with the big banks this week, and the rest of the country’s heavy-hitters will follow soon enough.

But before they do, there’s still time to try out Goldman Sachs’ “unusually attractive” investment strategy.

It works around earnings season, and it’s historically netted a 13% return on average in just a few days.

But the combination of low expectations and plenty of pessimism makes now an even better time to put it into practice – especially if you know which sectors and companies to apply it to.

So that’s today’s Insight: how Goldman’s investment strategy works, and which sectors and companies could set you up for some big wins.

Read or listen to the Insight here

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