Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) is pressing ahead with its massive Arizona expansion after its first U.S. chip plant delivered stronger-than-expected early results, even as the company grapples with water shortages, power reliability issues and labor constraints tied to the state’s harsh desert environment.
Expands Arizona Operations
National Development Council Minister Yeh Chun-hsien told the Taipei Times on Tuesday that Taiwan Semiconductor’s Arizona investment project has progressed better than expected, with the first Arizona fab generating $16.14 billion New Taiwan dollars ($514 million) in profit during its first full year of mass production.
Yeh said Taiwan Semiconductor was surprised by the smooth trial run at the facility, which strengthened the company’s confidence in the project’s outlook.
At the same time, Yeh said Taiwan Semiconductor continues to face challenges tied to Arizona’s dry climate, water shortages, power supply instability, environmental regulations, and labor constraints.
He added that Taiwan Semiconductor also wants more Taiwanese semiconductor suppliers to expand into the U.S. alongside the company.
Taiwan Semiconductor has already completed construction of its second Arizona fab and started building a third facility earlier this year as part of its original $65 billion U.S. investment plan.
The company later expanded that commitment with an additional $100 billion investment plan covering more fabs, packaging facilities, and a research center.
Taiwan Semiconductor Technical Analysis
TSM is still holding a bullish longer-term structure: it’s trading about 2% above its 20-day SMA ($391.32), 9.7% above its 50-day SMA ($363.88), and 28.6% above its 200-day SMA ($310.50). That stack of rising moving averages, plus the 20-day SMA staying above the 50-day SMA, keeps the trend bias pointed up even with premarket weakness.
Momentum also leans constructive: MACD is above its signal line and the histogram is positive, which suggests downside pressure is easing versus the prior downswing. In plain English, when MACD stays above the signal line, it often means pullbacks are getting bought faster and the trend has a better chance to resume.
From a levels standpoint, the chart is close enough to recent highs that overhead supply matters: a push back toward the May peak area can still run into sellers. On the downside, the next “line in the sand” is well below the market, so any deeper dip would likely be judged by whether it holds above the mid-term trend gauges rather than by day-to-day noise.
- Key Resistance: $414.50 — a nearby ceiling just below the $420.00 52-week high zone where rebounds can stall
- Key Support: $360.50 — a key area near the 50-day SMA ($363.88) where trend buyers may look to defend the uptrend
Analyst Consensus & Recent Actions: The stock carries a Buy rating with an average price forecast of $420.00. Recent analyst moves include:
- Barclays: Overweight (Raises forecast to $470.00) (April 22)
- DA Davidson: Buy (Maintains forecast to $450.00) (April 17)
- Needham: Buy (Raises forecast to $480.00) (April 16)
Taiwan Semiconductor Top ETF Exposure
- Harbor International Compounders ETF (NYSE:OSEA): 7.12% Weight
- Nicholas Crypto Income ETF (NYSE:BLOX): 8.31% Weight
- Pacific NoS Global EM Equity Active ETF (NASDAQ:GEME): 9.98% Weight
Significance: Because TSM carries such a heavy weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.
TSM Price Action: Taiwan Semiconductor shares were down 1.35% at $399.08 during premarket trading on Tuesday. The stock is approaching its 52-week high of $420.00, according to Benzinga Pro data.
Photo by Jack Hong via Shutterstock
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