Home Business News TSMC shares slumped as Taiwan defeats Intel's $ 20 billion expansion challenge

TSMC shares slumped as Taiwan defeats Intel’s $ 20 billion expansion challenge


Β© Reuters. Logo of Taiwan Semiconductor Manufacturing Co (TSMC), located in Hsinchu

Shares of TAIPEI (Reuters) -Taiwan Semiconductor Manufacturing Co Ltd (TSMC) fell almost 4% on Wednesday after Intel Corporation (NASDAQ πŸ™‚ announced a $ 20 billion plan to expand its advanced chip manufacturing capacity, even as the Taiwanese Economy Minister seeks to reduce the impact.

On Tuesday, Intel said it would build two factories in Arizona and open factories to outside customers, directly challenging two other companies around the world that can produce the most advanced chips – TSMC and Samsung Electronics (OTC πŸ™‚ Co Ltd. Korean.

Shares of TSMC, the world’s largest contract chip maker with clients including Apple Inc (NASDAQ πŸ™‚ and Qualcomm (NASDAQ πŸ™‚ Inc, fell as much as 3.9% on Wednesday morning, compared to a drop of about 1% on the broader market.

TSMC announced plans in May to build its own $ 12 billion plant in Arizona, in a clear win by the Trump administration at the time in an attempt to win over the global tech supply chain. from china.

Taiwan’s Economy Minister Wang Mei-hua said Intel’s plan “is not a challenge” for the island’s formidable semiconductor industry.

“First of all, I believe our whole semiconductor ecosystem is very good, and secondly our manufacturers are amazing and are constantly improving their technology,” she said.

Wang said she would be pleased to see a partnership between Taiwan and the US on semiconductors “but of course we still hope they can increase investment in Taiwan.”

TSMC did not immediately respond to a request for comment.

LONG-TERM IMPACTS?

The move by Intel’s new CEO, Pat Gelsinger, is aimed at restoring Intel’s reputation after a manufacturing stumbling block caused shares to plunge last year.

Sherman Shang, a research analyst at Fubon Securities Investment Services in Taipei, said Intel had tried to do this before but with little success and “basically” the new plan made no difference, that means TSMC shouldn’t be affected, and its cutting-edge technology is difficult. suitable in all cases.

“Intel executives are living in an era before, and it’s very difficult for them to keep up with manufacturing,” he said.

But Mega International Investment Services analyst Alex Huang is more cautious.

“As new Intel chips go online, TSMC will be under pressure to assess its future performance and this will affect TSMC’s long-term competitiveness,” he said.

TSMC, like other tech companies, has benefited from the global trend of working and learning at home during the COVID-19 pandemic, as people flock to buy laptops and tablets. and other equipment.

In January, the company posted its best-ever quarterly profit, for the fourth quarter of last year, while also boosting its revenue and capital expenditure estimates to record levels because of its multi-year β€œmulti-year” forecast. growth association “.

It is extremely profitable thanks to the gold standard casting technology, with a gross profit margin of more than 50% and the capital expenditure plan for advanced chip production and development reaching between $ 25 billion and $ 28 billion in the year. now, up to 60% higher than the amount spent in 2020.

Up to now, TSMC shares have risen nearly 10% this year, bringing in a market value of about $ 542 billion.



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