This article first appeared on GuruFocus.
Taiwan Semiconductor Manufacturing Co. (TSM, Financials) has built one of the most prominent positions in global technology over decades. That position is now splitting the organization in two directions.
Taiwan wants to keep innovative chip-making at home. The U.S. and Europe want to produce more of it domestically. TSMC is already reacting.
The business is investing $265 billion in Arizona and other Taiwanese companies are planned another $20 billion in investment in the U.S. It’s not only about factories.
TSMC manufactures many of the powerful circuits that fuel the AI growth including chips designed by Nvidia. That makes Taiwan hugely significant in a supply chain that is increasingly seen as strategic by countries. The pressure to move production offshore is only intensifying.
US authorities have cautioned that chip tariffs could hurt companies who do not produce products in the US. Meanwhile, Europe is seeking to attract more investment from Taiwan. The closeness of TSMC to its clients can help offset geopolitical risk.
But there’s a catch. It costs more to produce chips outside Taiwan and TSMC’s edge has always been about manufacturing efficiency.
That leaves investors with one clear question. TSMC can develop more plants across the world. The harder thing is doing it without throwing out the economics that made the corporation so dominant.
https://finance.yahoo.com/markets/stocks/articles/tsmc-rises-nearly-3-265-213735953.html
