Tianfeng International Securities analyst Ming-Chi Kuo announced that Taiwan Semiconductor Manufacturing Company (TSMC) plans to invest an additional $100 billion in the United States over the next four years. Kuo described this as a mutually beneficial agreement, suggesting that this investment will optimize shareholder value for TSMC and serve as a positive factor in the long run.
While the $100 billion investment might appear substantial, Kuo emphasized that the absence of specific regulatory details allows TSMC to adapt based on future conditions. This flexibility is expected to have no adverse impact on TSMC’s profitability. However, Kuo pointed out that the major challenges for TSMC lie in meeting market demand and advancing in leading-edge processes.
TSMC’s U.S. facilities currently operate with an average gross margin ranging between 30% to 35%. This investment is projected to decrease the company’s overall gross margin by approximately 1.5% to 2%. To counteract this, TSMC plans to negotiate cost reductions within its supply chain, potentially creating new supply opportunities.
Additionally, TSMC aims to establish a research and development center in the U.S., positioning itself to attract top-tier talent from competitors like Intel (INTC) and IBM (IBM). This initiative will also enable closer collaboration with American material suppliers in research and development efforts.
