Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Taiwan Stock Exchange  >  Taiwan Semiconductor Manufacturing Company Limited    2330   TW0002330008

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED

(2330)
  Report
SummaryChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryAll NewsPress ReleasesOfficial PublicationsSector news

What a Small Chip Fab Really Buys -- Heard on the Street

share with twitter share with LinkedIn share with facebook
05/15/2020 | 02:32pm EDT

By Dan Gallagher

Anyone in the business of making chips knows that little things can make a big difference.

Taiwan Semiconductor Manufacturing, better known as TSMC, currently makes chips with circuitry measuring 5 nanometers thick. That is about twice the diameter of a strand of human DNA, and is the most advanced chipmaking process in production today. It will be put to use in the new fabrication plant the company is now planning to build in Arizona, with the explicit blessing of the U.S. government.

But despite the impressive-sounding specs, the project TSMC announced Friday morning will actually be rather limited in scale and impact. The company says it will spend a total of $12 billion on the project over an eight-year period starting next year; TSMC's capital expenditures this year alone are expected to top $15 billion. And by the time the plant is fully up and running in 2024, 5 nanometers won't even count as top of the line anymore. TSMC disclosed on its earnings call last month that its 3-nanometer process is expected to be in volume production by the second half of 2022.

Nor will the project do much for the U.S. government's widely touted efforts to bring more of the high-tech supply chain onshore. TSMC says the Arizona facility will produce about 20,000 silicon wafers a month. That is just one-fifth the size of its largest fabs currently running in Taiwan and wouldn't even be close to meeting the needs of the company's largest U.S. customers. Mark Li of Bernstein estimates that Apple alone requires 60,000 to 100,000 wafers a month. He also says that TSMC's history with other fabs built outside of its home base in Taiwan suggest the Arizona facility will be a "margin drag" unless government incentives or higher prices can make up the difference.

What the new facility does buy TSMC is a better seat at the table. Chipmaking has become a high-profile weapon in the trade war between the U.S. and China. That point was driven home Friday morning when the Commerce Department released new rules that add further restrictions to chip products sold to Huawei and its subsidiaries. The rule would appear to sharply limit TSMC's ability to supply chips to Huawei, since they are mostly made with equipment from U.S. companies such as Applied Materials, KLA and Lam Research. Those three stocks averaged a drop of 5% Friday morning.

TSMC's U.S.-listed shares fell Friday as well, though it is highly likely the company's Arizona project will help shield it from some of the fallout. Citi's Atif Malik wrote to clients that the timing of the two announcements was likely "strategic and part of a compromise" that would allow TSMC to keep producing some chips for Huawei while also being subject to the new regulations. Pierre Ferragu of New Street Research believes the new export controls are a way to give the Trump administration more negotiating leverage to limit Huawei's "commercial ambitions" as opposed to killing the Chinese tech giant outright.

Chipmakers might just be pawns in a geopolitical game, but TSMC's latest move could keep it from being a sacrificed one. A little fab can go a long way.

Write to Dan Gallagher at dan.gallagher@wsj.com

 

Stocks mentioned in the article
ChangeLast1st jan.
AMP LIMITED -0.74% 1.345 End-of-day quote.-29.77%
APPLE INC. 3.75% 112.28 Delayed Quote.52.96%
APPLIED MATERIALS, INC. 0.76% 58.23 Delayed Quote.-4.60%
BASE CO., LTD. 4.15% 6780 End-of-day quote.150.80%
BASE,INC. -2.47% 11460 End-of-day quote.552.99%
BYD COMPANY LIMITED -0.39% 103.1 End-of-day quote.165.38%
KLA CORPORATION 1.83% 187.91 Delayed Quote.3.58%
LAM RESEARCH CORPORATION 0.95% 330.27 Delayed Quote.12.95%
TAIWAN SEMICONDUCTOR CO., LTD. -4.39% 38.15 End-of-day quote.-28.82%
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED 0.24% 424 End-of-day quote.28.10%
THE NEW HOME COMPANY INC. 1.94% 4.72 Delayed Quote.1.29%
share with twitter share with LinkedIn share with facebook
All news about TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED
09/24Caught in China-U.S. trade war, Taiwan offers support to chipmakers
RE
09/23TSMC warns China-U.S. deleveraging will drive up costs
RE
09/19KEYWORDS : Moore's Law Is Dead. Long Live Huang's Law. -- WSJ
DJ
09/18Huang's Law Is the New Moore's Law, and Explains Why Nvidia Wants Arm
DJ
09/18TAIWAN SEMICONDUCTOR MANUFACTURING : pledges deeper U.S. ties as Chinese jets ha..
RE
09/17TAIWAN SEMICONDUCTOR MANUFACTURING C : Ex-dividend day for quarterly dividend
FA
09/16Huawei phone prices rise in China on fears of chip shortage
RE
09/15CHINA'S SMIC APPLIES TO RENEW LICENC : state media
RE
09/14South Korea government, Samsung team up for self-sufficiency after Japan expo..
RE
09/11TAIWAN SEMICONDUCTOR MANUFACTURING : TSMC August 2020 Revenue Report
AQ
More news
Financials
Sales 2020 1 298 B 44 356 M 44 356 M
Net income 2020 479 B 16 354 M 16 354 M
Net cash 2020 364 B 12 452 M 12 452 M
P/E ratio 2020 23,0x
Yield 2020 2,53%
Capitalization 10 994 B 376 B 376 B
EV / Sales 2020 8,19x
EV / Sales 2021 7,47x
Nbr of Employees 48 752
Free-Float 93,6%
Chart TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED
Duration : Period :
Taiwan Semiconductor Manufacturing Company Limited Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED
Short TermMid-TermLong Term
TrendsNeutralBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 26
Average target price 467,83 TWD
Last Close Price 424,00 TWD
Spread / Highest target 50,9%
Spread / Average Target 10,3%
Spread / Lowest Target -27,8%
EPS Revisions
Managers
NameTitle
Che Chia Wei Vice Chairman & Chief Executive Officer
Te Yin Liu Chairman
J. K. Wang Senior Vice President-Operations
Jen Chao Huang Chief Financial Officer
Renzhao Huang Chief Financial Officer
Sector and Competitors
1st jan.Capitalization (M$)
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED28.10%375 726
NVIDIA CORPORATION118.85%317 724
INTEL CORPORATION-17.86%212 395
BROADCOM INC.12.90%144 326
QUALCOMM, INC.27.16%129 186
TEXAS INSTRUMENTS6.55%126 693