chip giants diverge: tsmc and micron invest big, intel and samsung pull back

2025-04-03 tsmc

Taipei, Thursday, 3 April 2025.
the semiconductor industry faces an uncertain future, but tsmc and micron are making aggressive investments, bucking the trend of strategic contraction from intel and samsung. tsmc is investing an additional $100 billion over the next three years. this divergence comes as the us chips act implementation faces potential hurdles, with hints of subsidy withholding to push for greater domestic expansion. the semiconductor industry is projected to increase by 3% in 2025, reaching $160 billion.

tsmc’s strategic investment

TSMC’s significant capital expenditure signals confidence in long-term demand for advanced chips [1]. The company announced a $10 billion USD investment in its Arizona plant on April 1, 2025 [6]. This move aims to bolster manufacturing capacity and potentially solidify its market leadership [GPT]. TSMC plans to begin production of 2 nm chips in 2026 [6]. These investments could positively influence TSM’s stock by demonstrating a commitment to growth and technological advancement [GPT].

market dynamics and competition

The semiconductor industry’s capital expenditure (CapEx) is projected to reach $160 billion in 2025, a 3% increase from 2024 [1][3]. In contrast to TSMC’s expansion, Intel plans a 20% reduction and Samsung an 11% reduction in capital expenditure for 2025 [1][3]. This divergence highlights a strategic repositioning among key players [1][3]. Intel also announced the postponement of its Ohio fab opening from 2027 to 2030 [1][3]. These shifts may affect the competitive landscape and potentially benefit TSMC’s market share [GPT].

geopolitical factors and the chips act

The U.S. CHIPS Act, designed to incentivize domestic semiconductor manufacturing, has allocated $32 billion in grants and $6 billion in loans for 48 projects [1][3]. However, U.S. Commerce Secretary Howard Lutenick suggested that promised subsidies might be withheld to encourage further expansion of U.S. projects [1][3]. This creates uncertainty and adds complexity to investment decisions [alert! ‘The impact of potential subsidy withholding is speculative’]. Trump’s recent announcement of a 32% tariff on Taiwan, though temporarily exempting semiconductors, introduces further geopolitical risk [4]. These factors could influence investor sentiment towards TSMC [GPT].

expert opinions and industry outlook

An industry analyst stated, ‘The CHIPS Act is a game changer, but it’s a long-term play’ [1]. Another analyst believes the current market correction is temporary, anticipating a strong rebound in the second half of 2025 [6]. SEMI forecasts global fab equipment investment to increase by 2% to $110 billion in 2025 [1][3]. China’s semiconductor equipment spending is expected to decrease by 24% to $38 billion in 2025 [1][3]. These perspectives provide context for evaluating TSMC’s strategic moves and potential stock performance [GPT].

trump’s tariffs and potential impacts

President Trump announced a 32% ‘reciprocal tariff’ on Taiwan, which ranks as the seventh-highest among countries facing such tariffs [4][7]. While semiconductors are temporarily exempt, this action has sparked concerns [4]. Trump stated that Taiwan ‘took away all our computer chips and semiconductors,’ despite TSMC’s investments in the U.S. [4][7]. These tariffs, scheduled to take effect on April 9, could trigger retaliatory measures and escalate trade tensions [4]. The Taiwan government has protested the tariff, citing its lack of basis in trade relations [4].

Bronnen

Capital Expenditure Market Trends