A recent report by JPMorgan highlights major market concerns over Taiwan Semiconductor Manufacturing Company's (TSM, Financial) potential involvement in a joint venture with Intel (INTC), fearing negative impacts on long-term returns and market position. However, TSM's strategic plan, involving a substantial additional investment in the U.S., aims to clarify any doubts regarding collaboration with Intel during upcoming financial discussions. This move is anticipated to bolster investor confidence.
JPMorgan projects TSM to become the largest provider of advanced processing capacity in the U.S. by 2028-29, securing significant outsourcing from Intel’s product group. Despite potential competition from Intel’s wafer foundry business, TSM's position appears robust. The firm's stock, having dipped 25% from its peak, partially reflects mild recessionary concerns. Consequently, JPMorgan adjusted TSM’s target price from 1,300 to 1,275 New Taiwan dollars but maintained an "Overweight" rating. A short-term stock rebound is expected, particularly if the worst-case scenario regarding semiconductor tariffs is avoided.
