Taiwan Semiconductor Manufacturing Company (NYSE:TSM) share price opened at $144.24 and has been on an upward trend through the trading day, entering the final hour of the US main session up 1.71%. TSM shares YTD performance has gathered quite a few followers, with a 42.88% uplift marking an excellent 1st quarter for the Semiconductor giant.
Taiwan Semi shares are also listed on The Taiwan Stock Exchange under ticker 2330.TW.
On top of what has been an excellent years’ performance, TSMC has been in the news as the United States government has announced plans to provide a substantial incentive of $6.6 billion in grants and a further $5 billion in loans in an effort to fortify the nation’s semiconductor manufacturing capabilities. TSMC are the leading manufacturer of advanced chips in the US and are scheduled to construct three semiconductor factories, commonly known as fabs, in Arizona, marking a pivotal stride in America’s commitment to reducing dependence on foreign chip supply chains.
TSMC holds a prominent status in the global semiconductor industry, underscored by its production of around 90% of the world’s most sophisticated chips, which are essential to various high-tech applications, from smartphones to artificial intelligence systems. The strategic incentive by the United States aims to localise the production of these critical components, minimizing the nation’s vulnerability to international supply disruptions.
The investment places Arizona at the centre of one of the largest foreign direct investments in the state, with a promise of a total expenditure exceeding $65 billion. The initiative represents an ambitious industrial leverage for Arizona’s economy and the broader US tech sector.
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Approximately 6,000 high-wage technology positions are expected to be generated directly by the three fabs, with an additional 20,000 indirect jobs predicted in ancillary domains such as construction and services, potentially transforming the region’s labor market and economic landscape.
The initiative gains momentum with the forthcoming production schedule of the first fab, set to commence in the first half of 2025. This timeline signals a swift response to the growing demands for domestic chip production, with potential benefits to US customers gaining access to locally sourced semiconductors.
President Biden has highlighted the significance of onshoring production capabilities, especially in light of the stark supply chain vulnerabilities exposed during the COVID-19 pandemic. By advancing semiconductor autonomy, the US seeks to insulate itself from similar future disruptions that could endanger the tech industry and critical infrastructure.
The decision also resonates against the backdrop of escalating US-China trade tensions and the latent risk of military conflict involving Taiwan, which could potentially destabilise the island’s chip-making capacity. Ensuring the production of these chips within US borders augments the country’s security and economic independence.
Analyst Price Targets – TSM shares have attracted 8 analyst targets, with the rating being a resounding ‘buy’. The average price on the cards stands at $154, almost 7% upside from the current mark. With a high bar set at $188, and a low of $125, TSM is clearly well supported by Wall Street.
US Commerce Secretary Gina Raimondo further emphasised that this expansion of advanced semiconductor manufacturing on US soil not only enhances supply chain resilience but also marks a noteworthy chapter in which the most advanced chips will be fabricated at scale in the United States for the first time. In what will also provide some stability for TSMC in a key US market, this is a commitment that goes both ways. The future requirements for semiconductors show no signs of abating, and TSMC are likely to remain near the forefront.
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