Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), a leading force in third-party chip manufacturing, is experiencing delays with its $40 billion project to construct two chip fabrication plants in Arizona. The production, initially scheduled for 2024, has been pushed back to 2025 due to labor shortages.
The company, which holds a 56% share in third-party chip manufacturing for clients such as Apple (NASDAQ:AAPL), Qualcomm (NASDAQ:QCOM), and AMD, has faced challenges including labor scarcity and difficulties in tool installation. J.P. Morgan's Gokul Hariharan highlighted these issues, adding that there were also delays in the allocation of funds from the CHIPS Act. This legislation, signed by President Joe Biden, was designed to strengthen the domestic chip-making supply chain.
TSMC, with a market cap of $439.29 billion and a P/E ratio of 14.61 according to InvestingPro, is a prominent player in the Semiconductors and Semiconductor Equipment industry. The company has been profitable over the last twelve months and analysts predict it will continue to be profitable this year. Its impressive gross profit margin of 58.63% and high return on assets of 20.34% are testament to its strong financial position (InvestingPro Data).
Despite the challenges in Arizona, the company's stock price increased 1% to $92.96, as reported by TrendForce on Thursday. This aligns with InvestingPro Tips that TSMC's stock generally trades with low price volatility and has yielded a high return over the last decade.
Samsung (KS:005930), the second major player in third-party chip manufacturing, currently holds a 12% market share.
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