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A Primer On Investing In Semiconductors (History, Supply Chain, Big Winners) - $TSM $ASML $CDNS
01:12:09
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- [00:00]
Ryan Henderson
For the past three years, IBKR individual clients averaged 24.3% annually, beating the S&P 500's 23.1%. Lower costs and 170 plus global markets matter. Interactive Brokers Member SIPC Visit ibkr.com performance.
- [00:24]
Brett Schaefer
Welcome to Chit Chat Stocks. On this show, hosts Ryan Henderson and Brett Shafer analyze businesses and riff on the world of investing. As a quick reminder, Chitchat Stocks is
- [00:34]
Ryan Henderson
a CCM Media Group podcast.
- [00:36]
Brett Schaefer
Anything discussed on Chitchat Stocks by Ryan, Brett or any other podcast guest is not formal advice or recommendation. Now please enjoy this episode. Welcome into the Chit Chat Stocks Podcast, a podcast to help you find your next great investment. My name is Brett Schaefer and I'm joined by my co host Ryan Henderson to bring you another special Wednesday episode. We are doing another stock market sector theme. This was a new style of episode. We came up with 2026. We think listeners like it. So we're going to keep doing it. I think over at least the next few years we're going to be. We've covered so far stock exchanges. That was a very fun episode. We've covered kind of the space and defense, space economy. We did companies like, what was it, even Planet Labs, I think maybe Black Sky Technologies, Red Wire, a lot of interesting startups within that space or sector, no pun intended. But today we are diving into what is probably the hottest sector at the moment, semiconductors. They've rapidly grown, which one might argue I was trying to do some analysis myself. And by market cap, I think unless you include all financial services around the world into one sector, which I think that is probably disingenuous, you'd want to separate insurance from banks and stock, stock brokerages, all that stuff. Semiconductors are the largest by market cap in the world. And given the importance of the sector, there have been massive winners going back decades. Famously, Nvidia has delivered a 500,000% gain since 1999 or 37% CAGR through to today. Ryan, you do a lot of these stats for fiscal AI. I think that is the best performing stock since they're at the IPO.
- [02:27]
Ryan Henderson
I believe it would be. Yeah.
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Brett Schaefer
From 1999.
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Ryan Henderson
Yeah.
- [02:32]
Brett Schaefer
All right. TSMC or Taiwan Semiconductor Co. We'll be talking about in a case study today, an 18% CAGR since. Since 1997. ASML. Another case study, we were doing a 26% CAGR since 1995, which is 150, 000% gain. I mean this is a sector with total market caps in the tens of trillions and Kenzie Peg's total revenue with $775 billion with projections for growth to $1.6 trillion in the near future. That's definitely depending on the AI buildout, things like that. Obviously things can change. If we go back 1960, the semiconductor market was very nascent and well under $1 billion in revenue. Estimates vary on the true size, but it is this decades long level of sustainable growth through market cycles, through the changing of the economy and really providing the computing backbone for the Internet, for smartphones, for computers, for PCs, for AI, for self driving cars, for electric vehicles. If you have reasonable starting prices like a lot of these stocks here, massive growth runways and margin expansion. That's how you get these massive winners. We're going to discuss the sector as a whole, the history, and then go through three separate stock case studies to try and identify characteristics that deliver these massive returns so we can learn and the listeners can learn to make better future investments. And we are going to conclude to look at ranking I guess our favorite three semiconductor businesses. But before I start, an important reminder. If you like the show even a bit, follow us on your podcast player of choice, subscribe to our newsletter and join our free chat community which is in the show notes and give us a five star review wherever you are listening. Ryan, I'm going to let you kick things off. Did you do any confirmation on Nvidia being the best performing stock of the 21st century?
- [04:25]
Ryan Henderson
They are. Nvidia is the best performer. Second is Monster Beverage and third I believe is actually Deckers Outdoor, which is the. They sell like Hokas, which that always catches me off guard.
- [04:40]
Brett Schaefer
Yeah.
- [04:41]
Ryan Henderson
Anyway, yes, Nvidia trounces the returns of every other company over the last 27 years. So the um, yes, they are by far the best performer. Before Brett dives into some of the history of the industry, I'm going to talk briefly about what a semiconductor actually is. I know some people are going to roll their eyes. People that know this industry are probably going to roll their eyes.
- [05:10]
Brett Schaefer
Hopefully not too many electrical engineers listening. If you are, skip this part.
- [05:14]
Ryan Henderson
Yeah. But I'll try to give my analogy and try to give the basic explanation for what a semiconductor does. And then what are the actual elements of the supply chain that allow a semiconductor to go from a drawing to a physical microchip that powers the modern Internet today? I'm going to start with a quote. A semiconductor is a material with electrical conductivity that falls between a conductor like copper, which allows electricity to flow freely, and an insulator like glass, which blocks electrical flow, this intermediate property allows semiconductors to precisely regulate and switch electrical currents, making them the fundamental building blocks of all modern microchips and electronic devices. The analogy that I have heard, that I think is somewhat helpful is that of the smart doggy door. So if you have a doggie door that's always wide open, just a hole in the wall, obviously anything can walk right through it. So you can think of that as sort of the copper wire in this case. On the flip side, if you have a brick wall, nothing will ever get through it. So think of that as sort of the rubber or the glass, something that stops electricity from getting through. But the best solution is a smart doggie door. One that as the dog approaches, the door opens, and when the dog is gone, it stays shut. That is the equivalent of a semiconductor. The material defaults to acting like an insulator and blocking the current. But when you apply a small amount of energy, it instantly switches to a conductor and the electricity passes. When you connect today billions of these smart doggy doors together in an organized layered grid on a piece of silicone, you can form what we know, what we now know as a modern microchip. These microchips can then execute code because they convert written software instructions into a physical sequence of flowing electrical currents. And that is the basics of sort of what the modern economy rests on. While simple at its core, obviously the designs and the building of these chips has become incredibly advanced and one of like the modern marvels of the world that we're able to produce these things at such microscopic levels. But let's go through what the semiconductor supply chain actually looks like. So sort of the first stage, you have the blueprints. This is basically the ip, it's chip design firms like Nvidia, for example, that employ teams of engineers that are writing custom code to describe how a chip should behave. This design process includes buying licensing rights from pre made chip parts. For companies like arm, for example, I think ARM has thousands of patents for specific designs, especially with the CPU core I believe is one of one of their primary popular patents. And then you combine those with your own custom logic as well, and you build your own chip designs. It also often requires using EDA electronic design automation software like Synopsys or Cadence Design to simulate the chip so that the design firms employ a bunch of engineers, buy patents or rights to patents from other chip firms. They use software to simulate, they use custom code. And once the digital blueprint layout is finalized, most companies send them to a factory as a massive file Actually all design firms send them to a factory. Sometimes that factory just happens to be in house or under the same umbrella. The companies that specialize in chip design specifically and include businesses like Nvidia, amd, Broadcom, Qualcomm, those are probably the biggest by market cap, sort of the second stage here is what I would call manufacturing prerequisites. So this is what the actual manufacturers need in order to turn these ideas into physical atoms. So before the designs can even actually be built, there's a massive supply chain on the raw material side of things, most notably acquiring silicon. So quartz sand is mined and melted down into raw silicon. The silicon is grown into a massive cylindrical crystal called an ingot or ingot. And then specialized suppliers then slice these ingots with diamond saws into ultra thin circular discs called silicon wafers. If you've ever watched a video of like a Taiwan semiconductor factory, you'll typically see these circular discs almost looks like a dvd, just way thinner. And that is the basic or the, the, the base for chips. Side note, about 70 to 80% of the world's silicone comes from China. So they are the largest miner by far. And there are some, obviously there's other countries that do it as well, but yeah, that's by far and away the largest is China. Along with silicon, factories also have to buy a ton of specialty chemicals. The reasoning for each chemical is kind of technical. I tried to look into each one, but it's sort of an endless list of chemicals that you need for different elements of the manufacturing process. Ultimately it comes down to semiconductors are incredibly small. So any microscopic impurity can cause the entire chip to fail. So there's a whole bunch of chemicals used for layering and controlling contamination. That's sort of the basics. And then the other critical element of a factory being able to bring their clients designs into reality is equipment. If you watch a tour video like the one I was describing earlier of Type 1 semiconductor or any fabrication facility, you will see factories are full of some of the most advanced industrial machinery ever made. These include EUV machines and DUV Extreme, or what's the D stand for? I'm not sure, I can't remember. Ultraviolet Light. EUV and DUV are kind of the machines that ASML is known for.
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Brett Schaefer
Deep, deep, ultraviolet, extreme and deep. There we go.
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Ryan Henderson
Yeah, and those machines can cost upwards of $350 million a piece. There's also machines from companies like Applied Materials and LAM Research with which help with etching or layering. And so these are all kind of the Suppliers that go into a factory. So just to go through it one more time, big silicon providers are basically China. And the companies that are most known are Shin, ETSU Chemical and Sumco. Big specialty chemical providers are companies like Merck Germany. Note that Merck Germany and Merck are not the same. Apparently there was. They split during World War II, I think. And DuPont, they're another one of the big specialty chemical providers. And then the major equipment suppliers are companies like asml, Applied Materials and LAM Research. The next stage is the fabrication itself. Fabrication facilities or manufacturers put all of the steps we just mentioned above together in one building or in many buildings, depending on the size of the company. The most notable of these is Taiwan Semiconductor. But there are some other pure play foundry businesses as well. So UMC is one. They're also based in Taiwan. GlobalFoundries, which I believe was the foundry side of the business to Advanced Micro Devices amd.
- [13:15]
Brett Schaefer
Okay, long time ago they spun it off, I think, and Intel's trying to get into this. They're trying to pivot from design plus fabrication to splitting that off. Having two separate businesses, which is proving much harder. Regardless of what their stock is doing right now, it's proving much harder than maybe many thought. And then.
- [13:38]
Ryan Henderson
Yeah, so Brett just alluded to it. Intel, that's an example of a more integrated provider. So this used to be the model where you would do the designs and the fabrication both under the same roof in the early days of the semiconductor industry. Now it's kind of been separated out and everyone has their own specialty for the most part. But Samsung, intel are probably the two biggest where they do both in house and then the last component is distribution. So once fabrication is complete and the wafers have been diced into individual CPUs or GPUs or in the case of Google TPUs, they are sent to the customers or to manufacturing companies like Foxconn. If you're wondering where you've heard the name Foxconn, they are the largest manufacturer for Apple, or assembler, I should say, for Apple. I believe they account for around 70% of iPhone manufacturing. There's also testing, packaging and assembly in there. Some fabs do that themselves, some pass them along. But yeah, that's kind of the gist of it. When you look through that whole supply chain, I was thinking about this. What's the best part as an investor to own in that supply chain? What is like the highest margin, highest growth potential? And I don't think it's any one element of the supply chain. It's the companies that have created something that no one else can or at least have such an advantage that no one else can catch them. And that exists all along the supply chain. So design, even Nvidia's GPUs have been hard to catch. And obviously there's workarounds depending on the workload that you're trying to create for, for these chips for. You've seen this with big tech rolling out their own chips. But you know, companies have big advantages with design. ASML has big advantages with equipment that they're, they're light years ahead, no pun intended there with the light part. And then Taiwan Semiconductor is they've created a not necessarily monopoly, but 90% of the leading nodes are manufactured by Taiwan Semiconductor. So and I'm sure the software design too, all of that is if you've created something that's specialized, way advanced, that's where you're going to get the highest margins. It's not from any specific segment of the supply chain, if that makes sense.
- [16:11]
Brett Schaefer
You research your investments, you analyze markets, you manage risk. But did you research your broker? For the past three years, IBKR individual clients averaged an annual return of 24.3% compared to 23.1% on the S&P 500. IBKR's lower trading cost, competitive rates, efficient execution and access to more than 170 global markets helped investors keep more of what they earn and put more capital to work over time. The broker you choose matters. Interactive Brokers member SIPC if you care about performance, find out why the best informed investors choose interactive brokers@ibkr.com performance okay, let's move into the history. I'll try to go through exactly how this industry was developed so listeners can help better understand where we are at today, the challenges of the industry and why the leaders have developed. For anyone looking at a comprehensive history and the geopolitical ramifications Ryan mentioned, this whole industry is global and it is turning into a national security priority risk for many of the countries involved. Many, many China and the United States as well as their allies. I would recommend people read Chip War provides a nice global industry perspective. So if we go back to who invented the not necessarily semiconductors, but the transistor and the modern computer chips. We have to look at Bell Labs which was a another first half of the 21st century. As I wrote here, the first half is a 20th century a joint research effort between Western Electric and AT&T. It's called Bell Labs and in 1947 the lab invented the first transistor which is what Ryan basically mentioned, the on off switch using the semiconducting materials. Old computers which were used to do very simple computations were vacuum tubes. They use vacuum tubes to do these calculations. And they were large, bulky and pretty easy to be disruptive. You came up with another pro or product like the semiconductor transistor. And if you look at this, this basic transistor, which, gosh, I forgot to put down, the person who invented it's on the tip of my tongue. It's the basis for semiconductor computers today. Instead of one transistor, I look this up, the Nvidia Rubin chip is going to have 336 billion transistors, which, as many listeners will know, will take all the information that is fed into them and get them down to the binary 1 or 0 decisions of the on off switch decisions. And that helps power the AI and computers and smartphones and everything out there today. Now, in 1954, the first silicon based transistor was made. 1958, importantly, the integrated circuit was embedd by Texas Instruments and Fairchild Semiconductor, which is one of the basis of the founders of Silicon Valley. And I think people from Fairchild Semiconductor went to form Intel, I think, and this enabled a huge cost, efficiencies, performance improvements and other factors. If you think integrated circuit, it's really in the name. You integrate everything together and build kind of a computer on a single circuit. 1965, the founder of Intel, Gordon Moore, came up with what's known as Moore's Law, stating that the number of transistors his engineers could put on an integrated circuit doubled every two years, while the same time the cost of producing them fell. So you have a combination of decreasing cost and an increase in performance over the last. What is this, 65 years? 60 years. That meant that computers would quickly become accessible compared to the gigantic mainframes of the day. This progress, which has largely held up through 2026, is why we have relatively cheap iPhones with better processing power than the entirety of NASA during the Moon program brings me great pleasure that people are using this, hopefully to listen to our show, but also doom scroll on TikTok. Eventually though, if Moore's Law holds up, decades from now, we're going to be able to jam even more, hopefully more intelligent processing power into tiny devices. This is the vision, I think, for smart glasses, even though I kind of find them, as we've discussed on this show, morally detestable. It's why they have that vision, these technology companies, because eventually you'll be able to, if Moore's Law Holds up, put tiny and tiny, you know, the same processing power of an iPhone within a tiny side part of your glasses. And it feels simple like. But I think people sometimes try to get too complicated with the semiconductor industry from an investor perspective. But there's a reason the industry has delivered long term growth going from under $1 billion in revenue to $775 billion today and probably 10x that in the decades ahead. Because the total ROI of having these insanely good computational devices is significantly higher than their cost. Even though the sector is collectively putting tens of billions of dollars annually, maybe hundreds of billions into factories, design, software and human capital, return on invested capital remains high and the overall profit pool is large across pretty much the entire supply chain. Of course we're testing this ROI threshold by throwing about a trillion dollars at the AI black box. But if any sector can deliver that returns, I think it's the combination of this, you know, they can deliver the healthcare miracles, complex informational chatbots and all the other stuff that are promised. Well, the ROI may still be positive if they're throwing trillions and trillions of dollars at the industry. Let's see, we've talked about the geopolitical stuff. I think maybe we skip that as we try to get through these case studies. But if we look at maybe the leaders of the industry. Historically, the semiconductor industry has been cyclical with some sub sectors like memory, which is Micron, Samsung, sk, Hynix, the popular Korean stocks of right now, they've been more cyclical than others. However, over the long term it's been a cyclical industry with long term secular tailwinds as demand from customers has gone up and to the right. Over the decades, the companies have been able to put up sustainable leadership positions or monopolies in the niches have delivered phenomenal returns to shareholders. As we discussed in the opening. If we look at the early days, 70s, 80s and 90s, this was Texas Instruments, Intel 2000s. We had Samsung, Qualcomm, Broadcom emerge in the last 20, 25 years, Taiwan Semiconductor, Nvidia and ASML have come to dominate the industry. And in recent years we've seen a surge from the big three memory players like Samsung, sk, Hynix and Micron. We can even go down more in the supply chain. Applied Materials has been a leader for a long time. There's software from Cadence and Synopsys, there's architectural blueprints from ARM holdings, and if you look across and down the supply chain, you see virtually every company out there. You can use our friends at Fiscal AI and do this, they all deliver fantastic gross margins through the cycle. Even if they are selling to each other. One person has 70% gross margins. They sell to another provider who then sells to someone else who has, they have 60% gross margins. Then another person sells, that's another 60% gross margins. And the question you might ask is what is it about the semiconductor industry that prevents composition from driving down margins? And I think it's the fact that the ROI for the global economy is so massive. Is there anything else, Ryan, you think besides the fact that hey, we could sell everything for pretty penny, everyone makes that well and the end customer who buys the $1,000 iPhone is still happy?
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Ryan Henderson
No, I think that's, that's the important part here. As you look through the financials and you look at the growth of what seems like everyone in the industry. And to be clear, there are a lot of semiconductor companies that have fallen by the wayside and failed. But you look at the just market cap explosion of semiconductor companies combined, I think it, you could argue it still pales in comparison to the benefits that human beings have received from the growth of this industry. It's, you know, I can tap my device in my pocket a few times and have anything in the world delivered to my door in a few hours. That's, that's pretty nice. In a lot of that is because of the evolution of semiconductors. Do we want to talk Moore's Law and some of the disruption potential?
- [24:40]
Brett Schaefer
Sure. I think if you're looking at industry like this, you might want to ask. Well, there's been these leaders over the years that deliver these long term returns. Is there any risk from new technologies completely upending the industry? What's an example of this? I can't even think. Maybe in like consumer packaged goods. Coffee getting disrupted by something else. Things along those lines, soda getting disrupted by natural things, things of that nature. Or maybe tobacco. Tobacco getting disrupted by new nicotine devices. Is there something on the horizon in semiconductors that can completely make them obsolete? And I think there are questions out there about Moore's law. Continuing. Um, TSMC is down to I think a 2 nanometer node. For anyone that's wondering, 1 nanometer is equivalent to 0.00. I'm going to get this right.00001 centimeters. And with these tiny transistors, the gate for the transistor is only a few atoms thick. And given the probabilistic nature of single electrons, it kind of sometimes ignores the gate, which can present an operational issue. They've worked around this, but again, they're working at extremely microscopic levels at this point. And there are concerns that Moore's Law will continue. So all around people. This is why when you get the hype around companies like the quantum computing, or I wrote quantum computing, semiconductors, basically quantum computing technology, is why these stocks, even though they really generally don't have any business models at the moment, there's dozen out there, maybe even dozens if you count ones that are privately held. It's because if they can do what they promise, that could, and this is a if. Huge emphasis on the if. If the technology can be commercialized, you could see the semiconductor industry replaced with a quantum computing industry within a decade. Could provide massive value there. Now, despite the consistent presence of, say, a genius disrupting everything or a team of geniuses disrupting the current state of semiconductors finding something better, I still have high confidence that the profits from the semiconductor market, maybe if we exclude the absurd stuff coming out of memory at this exact moment, will be larger every decade moving forward. Of course, there's a small chance every year that there's some revolution out there that completely upends the computing market, makes semiconductors obsolete. It would make probably what plenty of the companies on this list obsolete that we're talking about today. But when we look at them, and we want to look at, look at some of these stocks in the case studies, we want to understand despite this tiny risk, the attractiveness of these businesses, why they've delivered such strong returns and what we can learn from them and whether there's any opportunities out there today. This is close to a potentially top in the cycle, or one may argue there's some elevated multiples as we're going to look at here. But I think it's fascinating nonetheless. Maybe there'll be stocks to keep on the watch list and if anything, maybe you can also apply it to other sectors to try to find winning stocks, monopoly positions, things like that.
- [28:03]
Ryan Henderson
Yeah, it's, it's. Sometimes it just boggles the mind when you think about how small these things are and the manufacturing supply chain that's been built. It's really astounding what we've gotten to. Let's go through. I think that gives a pretty good foundation for where we're at today, where semiconductors are at. To paint a picture of the current memory chip boom, maybe we could call it temporary or the beginning of something even larger. SK, Hynix, Samsung and Micron in 2026 will generate. So those are the memory chip, the three primary memory chip players. They will generate more in profits than all of Big Tech combined, which are their primary customers. It's pretty astounding to think about how much they are going to earn. I believe Micron is going to earn more in 2026 than they earned from 2000 to 2025 combined. So we're in quite a time to be doing this episode. Let's go through a few case studies. Brett, you've got two, I've got one. Who are we starting with?
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Brett Schaefer
We're starting with asml. And I will mention we'll maybe discuss the greediness of the memory chip companies at the conclusion of this podcast. But yeah, let's keep things moving. Get get ourselves on schedule here. It's one of the companies ASML that I mentioned in the introduction. They were originally a backwater the semiconductor equipment field, but they've slowly innovated their way out and gotten to the top of the food chain market cap wise of the subsector with a current market cap of $675 billion. And even if you looked at the stock after its development and full commercialization of the EUV lithography machines that were the sole reason that 5 nanometer and below transistors are possible, or 5 nanometer gaps if I'm using the wrong nomenclature, don't sue me, electrical engineers. Even so, over the last decade you could still have seen a 34% total return CAGR. Which leads me to believe maybe the lesson is that it's always early in semiconductors. This could be the exact wrong time to say that, especially with ASML stock trading where it is. There's actually a book called Focus the ASML Way that's on my reading list. I think people, anyone interested in this company or the semi cap space should probably look at that. But if we go to their journey they began their journey in 1985. They were spin off from Philips to research and design the emerging lithography systems used to print semiconductors. Designs think of lithography like a light projector that puts the designs onto the actual semiconducting material. Now the first 10 years were extremely shaky for for the business, which isn't uncommon with new technologies and required a lot of help from Philips funding that type of things. But they develop a system called the PAS 5500 and were able to go fully independent dependent as a publicly traded company in 1995. By the 2000s they were making inroads with new customers using its dual immersion machines that helped with manufacturing efficiency. But the key part of the story is in 2010 when the first extreme Ultraviolet lithography machine prototype was shipped to a customer, proving that the technology which used again, it's in the name extreme Ultraviolet lithography light to print tiny basically designs onto these semiconductors. And around the same time, the largest players in the space like tsmc, intel and Samsung, actually invested in ASML to secure the future of EUV technology. It was unclear at this time whether EUV would even work, but asm, ASML made the gamble and it paid off handsomely. The investments from the supply chain, perhaps a good hint at the time, maybe if we're looking back and trying to do a case study on this, like if we're sitting in the 2010-2015 period and trying to analyze whether ASML is a buy or not before they get this nice growth Runway from EUV machines. If you said, hey, Intel, Samsung, tsmc, the leaders in the industry, the leading customers of ASML and the semiconductor equipment companies, if they're investing in this company, maybe it's a good sign that we have more of a margin of safety than the stock price, the financials, the balance sheet would suggest. And it is these EUV machines that allowed the advanced semiconductor designs to be printed, as I mentioned. And it's why ASML is able to charge hundreds of millions of dollars for each machine sold to customers, because no one else has been able to copy them. And not even, not even China, I guess, which had kind of a national priority to do so. And you also get the services revenue on top every year after. I have a screenshot here from our friends at Fiscal AI, but I made it too small. I believe if I'm going To remember from 2012 through to today, maybe Ryan's able to read on his computer screen. I think the services revenue, which is essentially helping the manufacturers operate and service the machines, has grown at 18% CAGR since 2012. That's more of a recurring revenue where, you know, you sell the machine once, $400 million, but you get this recurring stream over the next decade plus of, hey, we have someone coming to your facilities, helping you with these things, making sure they all work perfectly. And asml, you know, they were successful and they've secured its position as the only supplier of EUV machines because, well, the United States, the West, sorry, they secured themselves as the only supplier of EV machines in the world and basically to the west because they had smart people and they built on a revolutionary technology. However, there are other reasons ASML maintains its dominance in euv, which recurring guest Leandro from Besteker Stocks discussed in his newsletter. And I agree with all these takes one, there are exclusive supply chain partners for asml. Now this is downstream from them, I think. No upstream, if I'm using the analogy correctly. Only for example, ASML only has access to some of the advanced subcomponents that make up an EUV machine. So if you wanted to copy them, you not only have to copy the design that ASML has, but you have to copy and get the same sort of mirrors or light sources or lasers that ASML is either acquired or had exclusive agreements on. Second, there are switching costs from the services, revenue from operating the machines. You have a whole factory set up to operate with EUV machines as one of the most important subcomponents of the assembly line. And if you wanted to pull that and put something new in, that might disrupt the whole thing. And these companies like tsmc, intel and what have you are investing tens of billions of dollars into each factory. Pulling out EUV and replacing with something else would be quite difficult. And you're not going to get disrupted overnight. And as well they work hand in hand with their supply chain partners like tsmc. I think the success of both these companies over the last decade are really because of each other. Leandro also has a great quote about investing in the semiconductor space from back in 2024. I think it's still relevant to today. Quote, investing in semiconductors is not about forecasting the next application that will require semiconductors. Instead it is about understanding and feeling comfortable with the fact that whatever comes more and more advanced semiconductor content will be needed in the future. How many people foresaw smartphones two decades ago? How many people foresaw cars with $2,000 in semiconductor content? I don't know the answer, but neither of these forecasts were needed to understand that technology and thus semis would play an increasingly important role in the future. I think that sums it up nicely. What prevents asml? Ryan, these are questions that probably we aren't qualified to ask, but what prevents ASML from getting quote ASML'd in the future?
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Ryan Henderson
Yeah, it's a good question. I think the current gap between them and I mean if it were to happen, I think it would maybe have to come from new technology entirely. Not necessarily someone catching up on the EUV front. Whether it's the exclusive agreements with suppliers or the just current technological advantage and process advantage. I think that's an understated part of all these companies. We're going to talk about it with Taiwan Semiconductor, the actual processes that they developed and iterated on for building and improving their equipment and manufacturing capacity.
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Brett Schaefer
And
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Ryan Henderson
when I'm thinking of Taiwan Semiconductor, I mean more buildings and the processes involved there, that's something that it's hard to do from scratch. Like you can't just catch up on a whim. I think these, I think asml, Taiwan Semiconductor, some of these companies that have built massive leads are going to be very, very difficult to catch with their existing business lines. Maybe if there's some new technology that disrupts EUV, that's how they would get ASML'd. But I don't, I don't know enough to tell you what it would be.
- [37:35]
Brett Schaefer
Yeah, I think maybe no one does except for some of the smartest engineers out there that are working on these type of things right now. ASML trades at a PE of 58. It's probably closer to trim territory for long term shareholders than buy territory. It's what I'd like to own in the future. It's probably a solid bet to look out for if the AI boom turns to bust. But I'd say I have the PE chart here, Ryan. You can kind of look and I like doing this with the case studies. Where was the best risk reward in ASML's history? And I kind of think maybe the 2010-2015 range when it was trading at a fairly low price to earnings ratio. I think sub 20, especially on a forward basis. But there's also just over a year ago in the summer of 2025 when it was back down to a PE of 25, when it's about to have this massive growth Runway from the AI infrastructure buildout and return since then, well, the PE has gone from 2025-61. So. Okay, what I'm saying is you had phenomenal returns to say 2021, 2023, 2024. You might think, oh, I missed the boat on ASML. There still can be opportunities out there. The market can get shaky, the market can get quite volatile. Don't think you won't ever have an opportunity to invest in these type of companies.
- [39:06]
Ryan Henderson
Yeah, I mean the cat was out of the bag with AI last summer and the stock traded down to 25 times earnings. Down from what was, I think 50 times earnings a year prior or two years prior. So yes, opportunities will present themselves. But I would say last summer we should have picked up on it. I think you actually asked me like, why, why shouldn't we own asml? I remember you, I think we talked about that on a podcast and I said it's, it's too big for me. It's not, you know, I felt like the cat was out of the bag. The story's been told and it's. I was completely wrong. And yeah, I would guess that would have been the best time honestly to buy it because there was no risk to the business model at the time. Like there, there was nothing saying this business is going to be disrupted or anything like that. And you knew there was another catalyst for growth for the semiconductor ecosystem broadly. So I'd argue, yeah, that was probably one of the easiest times to buy. Let's talk about my first case study. Taiwan semiconductor, known as TSMC. They were officially founded in 1987. There's a lot of great history on the business that's been written about and spoken about in interviews. Most of it I believe is included in the book the Chip War. So I recommend giving that a read, but I'll go through some brief history. The company was founded as a joint initiative between the Taiwanese government, Dutch electronics giant Philips and a group of private investors. From what I understand, it was basically the Taiwan government saying like to a bunch of the large Taiwanese companies at the time, like hey, you need to sort of strong arming them, you need to invest in this. But Morris Chang, who is now, he's a legendary figure in the history of the chip microchip evolution and I would argue probably one of the most important figures in the history of semiconductors overall. He was recruited for a while. I think basically the Taiwan government was trying to recruit him for 10 years to build out their entire semiconductor business. Taiwan made it like a leading initiative, like we want to be a leader in semiconductors. And Chang was kind of the one they honed in on. Chang, I think he worked at Texas instruments for about 25 years. I believe he won a Nobel Prize. He was widely considered one of the brightest people in the semiconductor space. He was passed over for the CEO job at Texas Instruments. And that is when I think that was late 70s, maybe 1980. That's when he decided to step away. So he joined a company initially after stepping away called General instrument. But in 1985 he finally accepted Taiwan's recruiting efforts. And the proposal for him was Chang would virtually get a blank check to lead a government backed research and development organization known as ITRI Industrial Technology Research Institute. And he could go sort of any direction he wanted with it. Chang apparently evaluated Taiwan's strengths and weaknesses at the time and determined that they would not really be able to compete as an integrated device manufacturer. He thought they didn't have they didn't have the knowledge in designs, they didn't have the sales relationships with customers. So instead he proposed the what was revolutionary concept at the time of being a pure play foundry business. And it took tons and tons of capital to, to become this. But when you are partnered with the government that certainly helps and it gave them the capital they needed. Side note, in the capital raising process, Chang was turned down by both intel and Texas Instruments before receiving an investment from Philips. Which I find kind of interesting given the competition that we've seen from intel and Taiwan Semiconductor over the last call it four decades. But yeah, big miss for both those companies. Here's a quote I found from a good write up. What Chang foresaw was how each step of the chip development process would become almost exponentially more expensive and complex as the node shrank. Keeping up with each step under one roof soon enough became very challenging, creating an explosion of fabless companies, meaning no in house fabs. Well there's not no, but there are far less in house fabs. While part of this, part of the success is certainly just down to incentives like customers, if you're Apple, you don't want, there's more incentive to work with a pure play foundry than someone who could also compete with you on the chip design front. So intel, if they've got the design firm and they've got the foundry, not only are they going to prioritize their own chips, but there's, you know, potential competition there too. Anyways, the other part that really let Taiwan Semiconductor take a step ahead of the rest of the competition was came sort of in 2022 with the bet on EUV. So in 2012, intel was actually the largest investor in ASML at the time. And EUV technology, as Brett just mentioned, was sort of in its infancy. Intel's management team apparently grew very impatient waiting for the EUV technology to be commercial ready. So they attempted instead to push their older DUV machines to their absolute physical limits. This gets into sort of the nitty gritty and the technicalities with their manufacturing process, so I'll do my best to summarize it, but apparently this effort to push their D D machines to their limits backfired big time. The process became incredibly complex, prone to errors, and their manufacturing yields plummeted to near zero. This delayed their 10 nanometer node by roughly 4 years and completely stalled their roadmap. This 10 nanometer node for intel would have been a 2.7 times increase to their density. So from, from the previous node. So we talked about Moore's law how the goal is to shrink the size of a chip by half every two years. They this was them kind of going for the home run and saying we can increase it 2.7 times. Taiwan Semiconductor, on the other hand, went a little less aggressive. So they, I guess, had a more pragmatic goal of 2xing the density. Here's a quote as to sort of what, what the difference is. So because DUV light waves are too wide to print sub 10 nanometer features in a single pass, manufacturers must use multi patterning. Splitting a pattern across multiple masks and exposing the silicon multiple times. TSMC decided to stick with double patterning instead of quad patterning. Quad patterning is apparently what intel went with to try to sort of create that monumental leap to the 10 nanometer node, because it's the equivalent of intel was swinging for the fences while TSMC was trying to hit singles and doubles. Tsmc, because they went with the double patterning, it helped keep their process simpler, and it boosted yields significantly during that time. Then, once they stabilized the 7 nanometer, they introduced EUV incrementally to print just a few critical layers. This allowed TSMC's engineers to master the temperamental EUV technology slowly without risking their entire production line. I'm stealing some of that from a summary of it, but I think it makes sense. Basically, they were a little more pragmatic, a little more patient, layered in EV technology slowly, and they sort of mastered it. So, and that's, I think, an important thing to distinguish. It's one thing to just have access to EUV technology, but how you integrate it is sort of the, the difference in your manufacturing productivity relative to peers. So intel and Taiwan Semiconductor both have access to ASML's machines, but because Taiwan Semiconductor had a more pragmatic, more patient approach, they were able to integrate it in a way that was much more effective and gave them a major advantage, which they've pressed since Taiwan Semiconductor today is an absolute choke point in the semiconductor supply chain. Industry estimates indicate that Taiwan Semiconductor manufactures over 90% of the world's leading edge sub 7 nanometer advanced chips, which is what modern AI compute basic primarily requires, apparently. I'm sure there's other chips as well,
- [48:45]
Brett Schaefer
but efficiency, Ryan, that's what it comes down to. Yeah, basically like if they had. If an Nvidia chip had to be 10 nanometer, it would be not nearly as good. So the fact that they can get the most. Yeah, it's just energy output, computational output, kind of that whole matrix. Yeah.
- [49:04]
Ryan Henderson
And it would. When I Think about the moat today. It would be very difficult to replicate the tech advantage for the tech and process advantage that TSMC has built. But it would also be difficult to replicate the production capacity advantage. They are massive. They've spent $220 billion in capex over the last. Since 2021. Most companies can't do that. So they've got, I guess most companies, maybe they could, but they shouldn't do it. But a lot of them also just can't. So they've. It's been a huge advantage for them. They've got facilities in Japan, Taiwan. They're building one in Arizona as well, I think, which is already operational if I'm not mistaken. Maybe it's still in production or being developed. But it's a massive advantage that they continue to expand with investment. So you might be asking, okay, they've spent $221 billion on capex, is that really an advantage? What if they're overbuilding? What if demand for the most advanced chips slows down and we're at sort of a temporary peak in customer demand for AI chips? That is a fair concern. And you look at Taiwan Semiconductor over the last couple of years, revenue has completely accelerated. They were growing sort of 10, 20%. I mean this is the largest chip manufacturer in the world. It's hard for them to grow a whole lot faster without just drastically raising prices because they have to build out capacity and it takes time. And they grew 41% year over year last quarter. That's. It's astounding growth rates for their size. Analysts think they will double revenue over the next three years. Now my question would be, I think it's a logical concern to say maybe demand is overstated in the short run, but it's the whole. I can't remember who said it initially, but like only the paranoid survive. It seems like that's kind of CC ways mentality today.
- [51:25]
Brett Schaefer
That's Intel. Intel invented that.
- [51:27]
Ryan Henderson
Well, that's iron.
- [51:28]
Brett Schaefer
So they stole it. Yeah, it's funny that they stole it from Intel.
- [51:32]
Ryan Henderson
Here's a quote from the fourth quarter conference call from 2025 from CC Way. I think it's fair. This really kind of stood out to me. Someone asked him about AI demand. He said, you essentially are trying to ask me whether AI demand is real or not. I am also very nervous about it. You bet. Because we have to invest about 52 to 56 billion dollars for the CapEx. Right. If we didn't do it carefully, that would be a big disaster for TSMC for sure. So of course I spend a lot of time in the last three to four months talking to my customers and then. And their customers. Customers. Because I want to make sure that my customers demand is real. I talk to those cloud service providers, all of them. Their answer is. I am quite satisfied with their answer actually. They show me the evidence that the AI really helps their business so they grow their business successfully and he or she in their financial return. So I also double check their financial status. They are very rich. Now part of this is kind of funny translation, but it's just to say like he's asking the same questions. I think he's probably as concerned as anybody about whether or not spending $55 billion is going to be worth it.
- [52:46]
Brett Schaefer
Just because you're concerned about something doesn't mean it won't happen though.
- [52:50]
Ryan Henderson
True. But don't you think they're booking these orders prior to the build outs?
- [52:57]
Brett Schaefer
Oh yeah, they'll be fine through the long haul. There's going to be a down cycle. There's got, there has to be at some point. People said the same thing in 2022 and we can look, look at, well, the revenue looked. Okay, wait, now you have your. Yeah, revenue dipped a little bit. I mean they have a very strong position through the cycle.
- [53:19]
Ryan Henderson
The bigger concern for me if I are an investor, actually am an investor, I think I own very small stake. But it trades at 30 times zbit, which is historically their most expensive around their most expensive multiple.
- [53:35]
Brett Schaefer
So margins are up.
- [53:38]
Ryan Henderson
Yeah, record profits, record multiple. It does feel like you're susceptible to a big drawdown here.
- [53:48]
Brett Schaefer
Yeah, I agree, I agree. But good business. And it's really fascinating that the last 15 years now have been. Not entirely, but a lot has been determined by choices from players throughout the space on what they thought of or did with the EUV technology. All right, yeah. Let's move to my case study. Number two. Cadence Design Systems. It's one of the two premier software providers for semiconductor manufacturing design. Really wanted to look at the history of the business since I've never looked at the software side of the semiconductor supply chain. Here is what the company says on its website because I think many listeners are thinking, well, what exactly do they provide? It says, quote, cadence is a market leader in AI and digital twins pioneering the application of computational software to accelerate innovation in the engineering design of silicon systems. Our design solutions based on Cadence's intelligent system design strategy are essential for the world's leading semiconductor and systems companies to build their next generation products. From chips to full electrical mechanical systems and the range of markets includes hyperscale computing, mobile communications, automotive, aerospace, industrial, life sciences and robotics. Interestingly, Cadence has underperformed some of the other players here since 1990. It has quote, only delivered a 12.5% total return, which is still fantastic, but underperforms some of the other winners out there. And it has done so with a PE that is currently sky high. We're at 50 or. Sorry, sorry. 85. Not even 55. 85. Revenue has grown at a 7.5% annual rate since 2005, but 12% from the bottom of the GFC in 2009. Now why are these software programs so valuable? One long lead times Getting a prototype of an advanced chip can take a while. Meaning if you can test, iterate and validate virtually through Cadence's software, peak performance can be achieved much faster. When the first real world chip is made by tsmc, you have these virtual testings essentially and instead of going six months to the factory and say, make us this prototype, come back and see if the physical one works. They probably do hundreds and hundreds of iterations within the software program, make sure they get it as right as they think they can. Then they finally get a physical product to be made and test that before it goes to mass productions. The second thing is real physics simulation. Through decades building up its expertise in the software program, Cadence has extremely realistic software programs for the chip world, similar to the Autodesk or the Dassault systems in engineering. And three the reasons people use them is saving money. Even though they pay. I'm sure who would be the largest customer here? Nvidia. They probably pay hundreds of millions to Cadence every year. The ROI from the save money, the speed. Just the way you can design much faster within these software programs is you just have a fantastic ROI there and you save a ton of money. You know, the same thing as building a bridge, automobile engines, skyscrapers. You want to make sure it's as safe as operates as well as it properly can and follows proper regulations with semiconductors. You also want to make sure that IP is being used properly, like with ARM and things like that. Now, it's much more complicated than this, but. But one could simply say that Cadence allows Nvidia, Apple, other players to build the chips in the virtual world before sending them to the factory. It is the first step in the semiconductor supply chain which gets slingshotted down to the other foundries before a smartphone is assembled and put in your pocket. Competition mainly comes from. Synopsys is pretty much a duopoly here. Although there's Some other players. And Synopsys does $8.67 billion in revenue versus 5.5 billion for cadence. But Synopsys just bought Ansys, which is a real physics simulation company that does have a large amount of non semiconductor revenue. I think an investor could probably simply say that the world is moving towards more virtual validation here. It's going to always get more software like in the design and testing. And it's going to make Cadence if they maintain their R and D and just maintain their lead as the leadership position here, that's going to be more valuable to designers every year, as well as the diversification of design efforts from new entrants such as hyperscalers. So you have more people designing chips. Okay, that's more Cadence subscriptions most likely. And this should give the company an expanding addressable market, secular growth, pricing power. I feel like it makes it a nice candidate for drillable growth. But the last interesting part is that the company and the Cadence story, despite its fantastic business model, they almost went bankrupt. This is a lesson in partnering with a good management team and a good company at the same time. In the 2000s, cadence shifted to a subscription and ratable license. At the same time, the telecom and Internet bust led to a down cycle in the industry. And in 2008, management made a hostile takeover of a competitor called Mentor Graphics, right at the time of the gfc. And then some accounting issues got piled on and the executive team abruptly left. The Stock fell to $2 a share in 2009 when Lip Bhutan, who is currently the Intel CEO, came from the board of directors to lead the business. He focused on what customers wanted, got cost discipline, went back to organic R and D spending instead of M and A to simplify things. And the stock price began to recover. Really a tale as old as time. We've seen that plenty of times before. And the stock price is now not $2 or $5 a share, it is 378. What are the disruptions risk for Cadence? I'd say vertical integration maybe. I think a company like Nvidia, you might argue, could they design their own software? Would it be worth it? There are apparently some internal design stuff at Apple and Google and some other places. But so far there's been no signs of major disruption here. There's the Synopsys acquisition of Ansys is combining to create a better product, potentially because you have the complications with things like robotics, EVs, even AI data center solutions where you need a comprehensive simulation for fluid dynamics heat as well as the electrical engineering in the actual computer chip. Cadence is building this internally but Synopsys combined with Ansys could be a much better value proposition. Now last quarter I look at the numbers here. Cadence grew revenue 24% which is higher than the long term average due to, you guessed it, Opera or artificial intelligence. And operating margin is at 28% over the last 12 months. Could that get higher? I think probably they I would guess given the fact that they only generate $5.5 billion in revenue compared to the rest of the industry. Into what the equipment companies? In the tens of billions. Nvidia's of course in the hundreds of billions. TSMC in the hundreds of billions. Intel might get back there someday for the value they're providing. I feel like they can add some really strong pricing power here. They maybe won't take it over three years. Let's hope they don't pull FICO or else everyone will get mad. Or a Micron. But they probably that that probably makes the business model very attractive and you still have the secular tailwinds. I would guess the $1.56 billion in the last 12 month operating earnings could over the next decade or so. $5 billion doesn't feel out of the question. But the problem is the market cap today is 100 billion. So hard to make the math work given the fact that they're not an explosive hypergrowth company.
- [61:40]
Ryan Henderson
Yeah, to me I just think this is like an Autodesk or an Dassault Systems for semiconductors. It feels like it would be mission critical. And you think about $5 billion in a land of trillions in semiconductor revenue. It does feel like a small take assuming that they are powering a lot of the designs. So yeah, I would say there's probably room for them to expand it. The let's talk our three favorite companies here. Note this is not our three favorite stocks at the moment because all the companies we just talked about are trading at near their highest multiples of the last decade. So again, not stock recommendations, but what are your three favorite businesses in the semiconductor sector that you would add to your watch list and be interested in buying in the next downturn?
- [62:41]
Brett Schaefer
I'm going to go number one. Asml. I think they have the best position. I've read them things about lithography. What is it called? Like penetration within the company. So using it less as a percentage of the manufacturing process versus other equipment makers. I don't know what to make of that, but it seems like I would think it's still mission critical. Second one will be TSMC and third one, which we didn't cover today, Applied Materials. I don't necessarily like the design firms because I think there's much more susceptibility to disruption. Intel, which also manufactured got disrupted by Nvidia. Nvidia could get disrupted by GPUs. There's just so much competition in that area where if you look at lithography, there's no one. If you look at advanced nodes, there's no one. That's why. And then Applied Materials niche, I think they're exclusive in a lot of things as well. With those three, you have no competition. What's not to like?
- [63:40]
Ryan Henderson
I would say ASML and TSMCR on my list as well. Taiwan Semiconductor would probably squeak above ASML for me. Purely just on understanding of the business. Like. Like I. Maybe not the business, but understanding of the direction. I feel like there's less technology disruption risk to Taiwan Semiconductor than there is to asml. Again, I don't know. EUV space and any electrical engineers might be laughing at that. But on the half chance that EUV gets used last or there's there's some other process that is used in any further advanced nodes. Taiwan Semiconductor still a beneficiary there. The third one for me, just because I don't know Applied Materials as well, are some of the equipment providers. I like the software companies, the EDA software businesses, Cadence Synopsys, I think they're going to show much less cyclicality in terms of revenue over a full cycle. But again, both are very expensive at the moment. So yeah, three best businesses for me, Taiwan Semiconductor, asml. And then I'll go Cadence Design.
- [64:59]
Brett Schaefer
Okay, we have a couple of listener questions I want to have. There was a lot. So we're not going to all of them guys. But I appreciate everyone in the substack chat doing that. Let's see, first one, what is the real mote in semiconductors? I think we talked about that already. Let's. How about this one? How should investors underwrite Nvidia if AI demand remains strong but margins eventually normalize? Would that. Would this still justify the valuation? What are we trading at? What's the Nvidia PE? Let's look it up quickly. 32. I just think there's a risk that their revenue is cut in half. Right.
- [65:39]
Ryan Henderson
The. Am I wrong? They are. Yeah. They're highly susceptible in some sort of a downturn. The other part here is the. The circular agreements where they fund customers or they invest in customers and then the customers purchase chips. Feels like bad vendor financing. It just gives Me kind of a icky feeling that they're having to prop up revenue a little bit. So look, if, if this AI bull market, AI demand growth continues for the next five years Nvidia will be earning probably four times more than they are today. But it's not, it's not necessarily locked in like, like it's almost. The more they earn the more incentive for their largest customers to invest in custom solutions.
- [66:47]
Brett Schaefer
Same with memory. Maybe not custom solutions but go into other providers. All right, another one. What part of the semiconductor value chain has the best 5 to 10 year risk adjusted return? Fabs, fabless design, memory equipment, EDA software, advanced packaging. I don't know but I think I have a, I have a bet on what the worst area will be and that is memory. I think they're being extremely greedy. TSC could do the same thing but they're not because they want to preserve a long term customer relationship. ASML could do the same thing. They could charge a billion per machine. But they're not and it's because they don't want to incentivize people to end their relationship.
- [67:27]
Ryan Henderson
Yeah, it's just harder when you're in a more competitive industry because if your biggest competitor is doing it then why won't you. Why won't you.
- [67:40]
Brett Schaefer
It tells me the stocks are going down 90% at some point.
- [67:44]
Ryan Henderson
Yeah. I would be curious what the barriers to entry are for building memory chips. Like compare that to a gpu. How much harder is a GPU designed to build? Like are Micron, Samsung and SK Hynix, are they in some irreplaceable territory like can no one build what they've built? If it, if it takes three years of investment. Yeah, this is going to be a. Maybe not them. Even if they earn outrageous profits over the next couple of years they're going to have challenging times ahead.
- [68:23]
Brett Schaefer
Okay, a couple more quick for anyone on the watch list comedy to look at nvmi. The company is called Nova. It is a semi cap equipment company that helps fabs get the most yield from each silicon wafer. Sort of like KLAC only 13 billion dollar market cap. Could be another small cap of the week we look at. Could be another company we look at. We'll put that on the watch list Someone people are talking about the geopolitical risk. I'd say quickly if TSMC goes down everyone goes down with them. So I don't know why TSMC gets a. It doesn't anymore. I used to have that multiple like discount. Someone was said they're astounded at the rate TSMC isn't able to ramp up production over the last two years. Well, there was a down cycle coming out of 2022, 2023, but at the same time they were diversifying that supply chain by investing in the west, such as the giant Phoenix area $100 billion plus manufacturing facility. So the question is there's a way to track what is TSMC capacity now and under construction. I just keep it simple and look at Capex and then there's some other one here from people. I'm sorry, there was a very long question about Qualcomm. We are not qualified to answer. So I think we can close things out here. Ryan, any closing thoughts on the semiconductor space? Thank you everyone for the listener questions.
- [69:50]
Ryan Henderson
It's fun to do this because it's like a marvel of human ingenuity and creativity and what we're capable of and studying that is. It's just exciting to see how far we've come. But I'm yet to find anything in here that's going to be in my portfolio at the moment. Everything feels a little rich and I'm not. There's definitely elements of the semiconductor industry where I don't truly understand all the competitive dynamics, especially on the design side.
- [70:24]
Brett Schaefer
Yeah, design I don't like as well. I'm going to say it right now. I'm going to put to the audience. I'm making a pact with the audience. In the next down cycle, I'm going to invest in some of the high quality companies. I guess I'll probably write about it on the Emerging Notes newsletter. But that is my pact with Ryan and the listeners.
- [70:47]
Ryan Henderson
I'll hold you to it.
- [70:48]
Brett Schaefer
But maybe what if the industry isn't cyclical anymore like people are saying?
- [70:53]
Ryan Henderson
Well, well then I guess my starting to. Starting to sound like an indicator there, Brett.
- [71:00]
Brett Schaefer
Exactly. I hope, I hope I jinx it. I hope I jinx it. All right.
- [71:04]
Ryan Henderson
I think that's going to do it. You want to take us out or you want me?
- [71:07]
Brett Schaefer
I can do it. As a disclosure, we are not financial advisers. Anything we say on the show is not formal advice or recommendation. Ryan I or any podcast guests may hold securities discussed in this podcast, may have held them in the past and may buy, sell, or hold them in the future. Thank you everyone for tuning in. I hope you learned a lot from this episode. We'll see you next time. Sam.