Recently, chip stock Taiwan Semiconductor (NYSE:TSM) offered up some new information on several new initiatives it was poised to engage in. One of the big things Taiwan Semi addressed was whether or not it would invest in the Arm Holdings chip design operation. CEO Mark Liu took to the stage at SEMICON Taiwan, where he opined that Arm Holdings was “…an important part of our ecosystem, our technology, and our customers’ ecosystem.” Despite the seeming importance of Arm Holdings to Taiwan Semi’s operations, though, Liu had no definite answer, instead punting that particular ball into sometime this week.
This response wasn’t particularly inspirational to shareholders, which left Taiwan Semiconductor stock down over 2% in Wednesday afternoon’s trading. Disappointing for those who wanted a clearer answer, certainly, but Liu had other points to cover.
He noted that the Arizona manufacturing plant is coming along well, which even put in an “extreme ultraviolet lithography machine.” However, there’s one problem that Taiwan Semi may not have considered: access to water. Water is a vital part of chip-making, and Arizona is currently in a “megadrought.” That means that multiple water reservoirs in Arizona are at record low levels, to the point where even farmers have less water with which to irrigate.
Regardless, analysts are on Taiwan Semi’s side. Taiwan Semiconductor stock currently stands as a Strong Buy by analyst consensus, with four Buy ratings and one Hold. Meanwhile, Taiwan Semiconductor stock also boasts 35.3% upside potential thanks to its average price target of $125.
