Why Taiwan Semiconductor Stock Has Jumped Today

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What happened

Actions of Taiwan Semiconductor Manufacturing Company (NYSE: TSM) jumped on Friday, probably in response to Intelof (NASDAQ: INTC) disclosure that its 7nm manufacturing process would be delayed. TSMC shares were up 11.2% as of 12:30 p.m. EDT, while Intel shares were down more than 15%.

So what

Intel has had runtime issues for years. Its 10nm manufacturing process has been chronically delayed, and the company continues to ship consumer products based on versions of its 14nm process. The company’s latest desktop processors, launched in the second quarter, are 14nm components.

Image source: Getty Images.

Intel’s delays didn’t matter much until rival Advanced micro-systems staged a comeback with its Ryzen PC chips and EPYC server chips. The latest generations of both chips use TSMC’s 7nm manufacturing process. AMD has been shipping 7nm parts since mid-2019.

When Intel announced its second quarter results Thursday night, the company revealed that its 7nm process was behind schedule. Intel said the timing of its 7nm CPU product has slipped by about 6 months and that process yields are about 12 months behind internal targets.

Now what

Intel’s problems on the manufacturing front will make it more difficult for the company to limit the market share stolen by AMD. Intel’s products are still competitive, and the company has maintained an advantage in single-threaded performance. But this advantage is the smallest in years.

Because AMD relies on TSMC to manufacture its processors, AMD’s success is TSMC’s success. As AMD continues to gain market share, TSMC will benefit from the return of the chip company.



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