The geopolitical situation makes stock markets and companies within the markets tremble. From the Russia-Ukraine war to China’s tensions with the West and many other instances, together it makes an impact on the global economy. Semiconductor giant Taiwan Semiconductor Manufacturing Co. (TSMC) is also upto take an action in response to counter the situation brought after the growing tension between China and Western countries. TSM stock also suffered amidst such circumstances.
On Wednesday, The Wall Street Journal reported TSMC is seeking to expand and for which it is considering Japan as its preference. WSJ cited a source in the report who indicated the Japanese government is also ready to welcome the chip manufacturer. The government would permit it to take the construction beyond the stage of initial manufacturing.
It also added TSMC’s plan to deploy for the under development factory in Japan. The facility would be developing relatively less-advanced chips intended to be used in automobiles and vehicles. However, it would allocate the additional capacity towards developing more advanced technology.
Issue Around China’s Claim on Taiwan
The issue of Taiwan’s independence from the dominance that China claims to have on the country became an international issue needed to be dealt with. Many countries and global leaders have raised their concern and support.
Concern over Taiwan’s continued independence from China has been expressed by world leaders. After recently visiting Taiwan, U.S. House Speaker Nancy Pelosi seems to have heightened tensions; as a result, China’s government began conducting military exercises and stopped some shipments from Taiwan.
According to Reuters, TSMC Chairman Mark Liu stated at an industry group event on Wednesday that “the U.S.-China trade battle and the increase of cross-Strait tensions have brought more serious challenges to all industries, including the semiconductor industry.”
The United States passed money to support the promotion of domestic production facilities in an effort to lessen its dependency on foreign chip fabrication. From cell phones to cars to medical equipment, a wide range of products require computer processors.
Not just TSMC is relocating production to nations that might be less directly impacted by China. Foxconn will produce some of the new iPhone 14 in India, according to Apple. According to Reuters, Foxconn, a company with a substantial presence in China, also shifted some Apple product assembly to Vietnam in 2020.
All these factors together will eventually be responsible for effecting TSM stock prices in upcoming time. At the press time, stock price of TSM is trading at 63.58 USD witnessing a drop of 17.58% over the month.
Currently the overall market cap of the chip manufacturing company is around 329.38 billion USD.
Source: https://www.thecoinrepublic.com/2022/10/21/tsmc-expansion-in-japan-impacting-on-tsm-stock-price/