Nvidia Corporation's CEO Jensen Huang has recently addressed the relationship between his company and Taiwan Semiconductor Manufacturing Co. (TSMC) amid the political discourse surrounding the semiconductor industry. During an interview in WIRED's “The Big Interview” series earlier this month, Huang responded to President-elect Donald Trump’s assertions that Taiwan is taking market share away from the U.S. chip industry and the resultant implications for Nvidia's partnership with TSMC.
Huang underscored TSMC's indispensable role in the global tech supply chain, describing the company as an “extraordinary” innovator under effective leadership. He stated, “If anything, TSMC as a company gets better and better every single year that we work with them so our relationship with TSMC is going to continue.” This comment reflects Nvidia's commitment to its long-standing collaboration with TSMC, which has been ongoing since 1995 and has significantly contributed to the production of Nvidia's high-performance graphics processing units (GPUs).
In the context of ongoing tensions, Trump has expressed concerns regarding Taiwan's semiconductor industry on several occasions. In a recent appearance on the Joe Rogan podcast, he accused Taiwan of undermining the U.S. chip sector and has critiqued the U.S. CHIPS Act. Moreover, he suggested imposing tariffs on Taiwanese chips, a move that could adversely affect TSMC, which supplies major firms such as Nvidia and Apple Inc.
Despite Trump's remarks, TSMC has reaffirmed its commitment to significant investment in U.S. operations, with a $65 billion plan for advanced semiconductor facilities in Arizona remaining on track. Additionally, TSMC aims for a record global expansion with a projected investment of $38 billion to enhance its production capabilities by constructing multiple semiconductor fabrication plants worldwide by 2025.
Recent financial disclosures show TSMC's robust performance, with a reported consolidated third-quarter revenue of NT$759.69 billion (approximately $23.50 billion), indicating a remarkable 39% increase year-on-year. The stock performance has mirrored this growth, with TSMC’s shares rising by 103.22% year-to-date. Nvidia's stock has similarly surged, increasing by 191.09% during the same period.
Analyst projections from firms such as Barclays and Needham suggest a positive outlook, setting an average price target of $226.67 for TSMC, anticipating a potential upside of 9.87%. Meanwhile, reports from DA Davidson and other analysts estimate an average price target of $154.67 for Nvidia, indicating a potential upside of 10.65%.
In closing, Huang has expressed his readiness to engage with the incoming administration, particularly regarding the significance of artificial intelligence as part of the broader technological landscape. He indicated that Nvidia is prepared to offer support to ensure that the new administration understands and navigates the complexities of this evolving field efficiently.
Source: Noah Wire Services