The chip industry has its ups and downs, which is why it's not uncommon for these companies to go through rounds of hiring and layoffs. However, when one company hires workers while others are cutting back, you must pay attention. One of two things could be happening. First, it could be a terrible management decision. Second, it could be fantastic if the company had insight into trends just on the horizon.

Taiwan Semiconductor (NYSE: TSM) made a move like that earlier in March, announcing it plans to hire 6,000 employees despite a downturn in the chip market. So is this a smart move or a huge mistake? Let's dig in and find out.

Taiwan Semiconductor is one of the world's largest chipmakers, but it doesn't sell its products directly to consumers. Instead, it contracts out to companies like Apple, Nvidia, and AMD to make their chips for them. Because of this arrangement, management likely makes many hiring decisions based on the orders placed by its large client list.

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Source Fool.com