2025.03.05 16:32 (Updated 2025.03.05) | Zheng Wen
TSMC Chairman C.C. Wei officially announced increased investment in the United States to mitigate potential future geopolitical risks (Image: Bloomberg).
TSMC's increased investment in the US is a long-term positive for Taiwanese stocks.
In the presence of US President Trump, TSMC Chairman C.C. Wei officially announced that TSMC would invest at least $100 billion more in the United States, estimated to include three new chip manufacturing plants, two advanced packaging plants, and a research and development center in Arizona. The news caused significant market volatility, with the Philadelphia Semiconductor Index closing down 4% on March 3. Analysts believe that while TSMC's stock price may indeed experience significant short-term fluctuations due to rising costs, the agreement allows TSMC to maintain its technological advantage, strengthen its supply chain resilience, and reduce potential future geopolitical risks, thus serving as a long-term positive for the Taiwanese stock market.
Some have questioned whether TSMC's increased investment in the United States will affect its gross profit margin. Chang Jung-jen, general manager of the online fund trading platform "Juheng Fund," believes that the United States has relatively abundant land and energy resources, which can make up for Taiwan's current problems of power and land shortages, and will be beneficial to TSMC's future capacity expansion. At the same time, the connection between Taiwan's semiconductor supply chain and the United States will be closer, and the model of "technology rooted in Taiwan, serving the world" will further consolidate Taiwan's key position in the global electronics supply chain.
Zhang Zhiling, manager of Prudential Market Value Momentum 50 ETF (009803), stated that TSMC's move is expected to circumvent the US tariffs on Taiwanese chips, thereby expanding its order intake from major US manufacturers such as Apple, Nvidia, and Qualcomm. Although the Taiwan stock market experienced a sharp decline on March 4th, the losses narrowed towards the end of the trading day. Moreover, based on historical experience, when the index retraces to the six-month moving average, it often presents a good entry opportunity. In addition, Taiwan's economic fundamentals are sound. The Taiwan Institute of Economic Research (TIER) expects Taiwan's economic growth rate to reach 3.42% this year, an upward revision of 0.27 percentage points from its previous forecast, indicating a continued positive outlook on the fundamentals. Once the uncertainties are eliminated, the stock market will reflect the performance of these fundamentals.
However, Chang Jung-jen also cautioned that as more Taiwanese companies enter the international arena, the Taiwan stock market will gradually develop a new supply chain model and winners, which will further test investors' stock selection strategies.
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