Intel Corp (INTC)

[walbert]

Because as you believe they're paying out more in dividend than they're earning and so will suddenly go poof?

Yes, when you experience negative cash flow for year after year after year, you do eventually go poof. TSMC's dividends have exceeded their free cash flow for all of the last four years and now their CapEx needs are greater than ever.

There's only a few ways to fix this:

1.) Reduce capital expenditures.
2.) Reduce dividends.
3.) Change the business model.

It's well-know that you have to have a certain level of sales to support the building of new state-of-the-art fabs. TSMC is right at that level and in danger of dropping below it.

Morris himself has said that the window of opportunity is rapidly closing. He recognizes the incredible complexity of the task he faces.