shares Taiwan Semiconductor Co., Ltd Manufacturing company (NYSE: TSM)TSMC, known as TSMC, fell on Monday morning, falling as much as 4%. As of 11:02 a.m. ET, the stock was still down 3.9%.
The events that happened this weekend and the comments he made Specialized in semiconductors The founder put some investors on edge.
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At a company event this weekend, founder Maurice Chang spoke about the ongoing campaign by US regulators that limits the sale of the most advanced chips used in… Artificial Intelligence (AI) For companies in China. He said that the company will face the “most severe challenges” yet in achieving growth, according to a Bloomberg report.
“Free trade for semiconductors, especially the most advanced semiconductors, is dead,” Zhang said. “In such an environment, our challenge is how to continue to drive growth.” He went on to say, “TSMC has now truly become a weighted area that all the major powers want to secure.”
American officials and their allies fear that the most advanced artificial intelligence technology could end up being used by the Chinese military, something the administration seeks to prevent. TSMC has reportedly halted shipments to Chinese chip company Sophgo after some of its advanced processors were found in products made by Chinese telecom company Huawei, according to a report by Reuters.
While comments of this magnitude may give investors pause, they should be taken in the context of other remarks made by TSMC officials. CEO CC Wei was more optimistic, noting that the company’s semiconductor facility being built in Arizona is “progressing well.” He remains confident in TSMC’s ability to increase its technological advantages and global industry leadership.
Despite the restrictions imposed since last year, TSMC has continued to achieve impressive growth. During the third quarter, revenue of $23.5 billion jumped 36% year over year, while earnings per share rose 54%.
Management expects the company’s growth spurt to continue. TSMC is on track for revenue of $26.5 billion, representing 35% year-over-year growth.
Despite any potential challenges ahead, TSMC produces an estimated 90% of the world’s most advanced processors. This puts the company in a prime position for AI-powered growth. At just 27 times over next year, TSMC’s price is attractive.
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Danny Vina He has no position in any of the stocks mentioned. The Motley Fool has positions for and recommends Taiwan Semiconductor Manufacturing Company. The Motley Fool has Disclosure policy.
Why Taiwan’s semiconductor manufacturing stocks tumbled Monday morning Originally published by The Motley Fool