After years of beating the market, chip stocks have had a rough year so far, but top tech investor Paul Meeks believes there’s still a stock that investors “must own.” The ProShares UltraShort Semiconductors ETF, an inverse ETF that bets on the industry, has rallied nearly 30% this year, while the iShares Semiconductor ETF is down 27.4%, showing how bearish the market is for the sector. But Meeks remains a fan of chip stocks. “If you think about semiconductors, they’re like the gold of the 21st century… They’re in every product so I can understand why people are so enamored with them. And there’s a good reason to be. “, Meeks, portfolio manager at Independent Solutions Wealth Management, told CNBC Pro Talks on Wednesday. However, he said he would focus on “some of the top companies,” “to be honest, not always U.S. companies.” His top pick in this area is Taiwan Semiconductor Manufacturing Company, the world’s largest chip maker. “TSMC is the dominant player in what it does,” he said. “I don’t know if any company in the tech sector, including FAANG in the United States, has a stronger position in such an important market,” he said. so”. He added: “When you invest as a global investor, you have to own TSMC. The chip giant had an outstanding second quarter, with the company posting a record net profit of 237.03 billion Taiwan dollars ($7.9 billion), up 76.4% from a year ago. and far exceeds Refinitiv’s estimates. The company also beat revenue for the second quarter, when it hit NT$534.14 billion, up 43.5% year-on-year. TSMC had forecast revenue of $19.8 billion to $20.6 billion in the third quarter – a significant increase from $14.8 billion in the same period last year. Why TSMC is important As the basis for the semiconductor industry, TSMC manufactures chips designed by other companies. Its customers include a wide range of major technology companies such as Nvidia, Qualcomm, etc. TSMC is also Apple’s most important chip supplier. To mark the company’s pivotal role in creating the world’s most advanced chips, US House of Representatives Speaker Nancy Pelosi met with TSMC Chairman Mark Liu during her recent visit to Taiwan. . Why Meeks Missed U.S. Chip Stocks On Tuesday, President Joe Biden passed bipartisan legislation aimed at enhancing America’s competitiveness with China by investing billions of dollars in semiconductor manufacturing. domestic and scientific research. The Chips and Science Act includes more than $52 billion in subsidies to American companies that make computer chips, as well as billions in tax credits to boost investment in chip manufacturing. But while Meeks admits that the new piece of legislation will benefit US chip companies in the long run, he doesn’t believe the sector will see a significant advance in the short term. “I think it’s a bit naive to think that their fundamentals will change because of the Chips Act and the construction of semiconductor foundries. [in the U.S.] because what happens is, even if they start digging today, you won’t see a chip … off this production line for several years,” he said. There’s quite a bit of time between now and then – before the US doesn’t even become a major player in worldwide chip production,” Meeks said. Read more How strong is the US consumer? Here is what Wall Street has to say – and the stocks it loves Intel is at the top of his list, with the company having “lost an opportunity.” He believes the company is well on its way to becoming a “chipmaker”, but it has ” make a big mistake” in the meantime. Meeks is also missing Advanced Micro Devices due to its exposure to the smartphone and PC segments. “As we enter a recession in the US, you know these consumer-oriented technologies p he said. Another stock Meeks is holding is Qualcomm. He said he prefers the stock for the long-term, but said short-term risks include its “significant” smartphone exposure and the possibility of a larger forecast downgrade.