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Taiwan Semiconductor Manufacturing Co’s (NYSE:TSM) close to 15% decline in stock value year-to-date coincided with Donald Trump’s inauguration as the U.S. president on January 21.
The market remains jittery over the contract chipmaker’s potential failure to deliver in sync with the expansion of U.S. manufacturing, ultimately taking a toll on its profit margins, the Financial Times reports.
Speculations included how Taiwan Semiconductor’s additional investment aimed to fix the manufacturing operations of its struggling rival Intel Corp (NASDAQ:INTC), following which the U.S. might prompt the Taiwanese chipmaker to divest operations being a monopoly.
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TSMC has yet to elaborate on the incremental $100 billion investment, unlike its first commitment to invest in production capacity in Arizona in 2020.
It then mentioned a construction and commercial production start date and named the process technology generation. It offered similar transparency when it ramped up its investment plans to $40 billion in late 2022 and then to $65 billion in April 2024.
This time, the company only said it would build three more fabrication plants, or fabs, on top of the three previously announced ones, plus two facilities for packaging several chips together on one substrate.
On March 3, Taiwan Semiconductor chief CC Wei announced a further $100 billion investment in the U.S. in response to Trump’s alleged accusations of Taiwan “stealing” the U.S. semiconductor business.
Trump said the additional investment would bring more chip manufacturing into U.S. territory.
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The additional $100 billion was an estimated price tag for plans that had been on the books for the long term. Reportedly, the company acquired enough land in 2020 to build six fabs.
Separate reports indicated Taiwan Semiconductor reaffirming Taiwan’s commitment to domestic investments and keeping the advanced tech in Taiwan.
In 2023, Taiwan Semiconductor held 67% of the market share in contracted semiconductor manufacturing and ~80% in advanced technology products.
Taiwan Semiconductor accounts for over a third of the Taiwan benchmark’s weight.
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This article Taiwan Semiconductor Is Down 15% Year-To-Date And Investors Are Concerned About Its Expansion Plans originally appeared on Benzinga.com
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