Explore the latest developments concerning TSMC Sinks 10%,.
TSMC Sinks 10%, UMC Down 16% as Chip Rout Deepens After Democrats’ Midterm Wins
TSMC fell 10% today, and UMC fell harder, as Democrats' bigger-than-expected midterm wins fed fears of a slower AI build-out.
TSMC's October sales, due next week, are the first read on its fourth-quarter guide.
Taiwan Semiconductor Manufacturing (TSM:NYSE) fell 10% today as the chip rout hit a second day. A Taiwan neighbor fell harder: United Microelectronics (UMC) dropped 16%.
TSMC had no news of its own. Democrats' larger-than-expected midterm wins raised fears of a slower AI build-out. Then Qualcomm, a TSMC customer, warned on memory costs after Wednesday's close, and Bloomberg reported this morning that Micron had paused a $4.5 billion Taiwan plant. Lam Research (LRCX:NASDAQ), which gets 18% of its revenue from customers in Taiwan, fell 10%.
Better Foundry Stock: Taiwan Semiconductor vs. Intel
Today, most companies that develop logic chips, like graphics processing units (GPUs) and central processing units (CPUs), use what is known as a fabless model. This simply means that they outsource the manufacturing of their chips to a third party. Two of the largest foundries in the world today are Taiwan Semiconductor Manufacturing (TSM +6.99%) and Intel (INTC +6.62%), and the better foundry stock to own, in my view, is an easy choice: it's TSMC by a wide margin.
Chip manufacturing is a capex-heavy, complex business. That is why so many chipmakers use third-party foundries. There is a constant push in the semiconductor industry to densify chips to make them more powerful and energy-efficient. This requires both expensive extreme ultraviolet (EUV) lithography equipment and technological expertise to achieve high yields.
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TSMC’s AI Opportunity Is Expanding. Here’s the Question That Matters for Its Stock Price
TSMC just posted its third straight earnings beat while AI demand outstrips supply, yet shares have dropped nearly 11% in a month. One question from the CFO's own playbook now determines whether the stock recovers or stalls from here.
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Taiwan Semiconductor Manufacturing (NYSE:TSM | TSM Price Prediction), better known as TSMC, last closed at $406.13. For TSMC, the 24/7 Wall St. price target is $516.16 over the next 12 months. That implies 27.09% upside, and our model rates the stock a buy with high confidence.
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