TSMC (NYSE:TSM) stated on Tuesday that it had discussed with some of its major customers about moving some of its chip manufacturing off Taiwan, but such a move appeared to be impossible. Some of TSMC’s major customers include Nvidia (NASDAQ:NVDA) and Apple (NASDAQ:AAPL). However, TSMC’s Chairman C.C Wei told reporters that the chip major is no longer considering the move. This decision stems from the fact that 80% to 90% of its production capacity is currently based in Taiwan.
Why was TSMC Considering Moving Fabs Out of Taiwan?
TSMC considered moving its manufacturing out of Taiwan. This was because geopolitical tensions between China and Taiwan escalated sharply. The tensions rose after Beijing conducted war games around Taiwan following President Lai Ching-te’s inauguration. Beijing labels Lai Ching-te a “separatist.”
Meanwhile, according to a Bloomberg report, Wei was formally appointed as Chairman of the company on Tuesday. He is the first person in years to hold both chairman and CEO roles at the company. Wei continues to anticipate a global growth of 10% in the chip market this year.
Is TSM a Buy, Sell, or Hold?
Analysts remain bullish about TSM stock, with a Strong Buy consensus rating based on a unanimous 11 Buys. Year-to-date, TSM has increased by more than 40%, and the average TSM price target of $163.11 implies an upside potential of 5.3% from current levels.
