The signage for Taiwan Semiconductor Manufacturing Co. (TSMC) is displayed at the company’s headquarters in Hsinchu, Taiwan, on Wednesday, June 5, 2019.
Ashley Pon | Bloomberg via Getty Images
TSMC’s listed shares in Taiwan rebounded on Monday after US chip maker Intel said it faces delays in its next-generation chips and could outsource some of the production.
TSMC closed almost 10% higher at Taiwan $ 424.5 ($ 14.48), a record high for the stock. Since Friday’s close, TSMC has added 998.32 billion Taiwanese dollars ($ 34.05 billion) in market capitalization.
The Taiwanese chipmaker received a boost after Intel said last week that it was delaying the release of chips containing so-called 7-nanometer transistors. These chips are considered to offer higher performance than previous generations.
Intel, which is already behind competitors like AMD, said it had encountered a problem in the 7-nanometer manufacturing process. Management at the US chip giant said during its second-quarter earnings call that it had made “contingency plans” that include looking at third parties to manufacture these semiconductors.
TSMC is a so-called foundry. That means it makes chips that other companies design. Apple is a customer, for example.
While Intel did not name potential third parties, analysts see TSMC as a competitor.
“Chip outsourcing to foundries is now its (Intel) contingency plan, which opens up a TAM (total addressable market) of approximately $ 20 billion to TSMC and puts more fuel into the advanced foundry market that is already working, “Szeho Ng, managing director of research at China Renaissance Securities, told CNBC by email.
He added that TSMC “practically monopolizes space”, referring to the production of chips with the 7-nanometer process.
Samsung Electronics, another company that operates a foundry business, could also take part in Intel’s business. Its shares rose more than 2% on Monday.
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