Tuesday, 23 April 2024

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Taiwan Semi (NYSE:TSM) Drops in Wake of Earthquake – TipRanks Financial Blog

Taiwan Semi (NYSE:TSM) Drops in Wake of Earthquake – TipRanks Financial Blog

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Shares of semiconductor major Taiwan Semiconductor (NYSE:TSM) are under pressure today after the island nation of Taiwan suffered its strongest earthquake in nearly 25 years. The development also casts a shadow over the global advanced chips supply chain.

Taiwan Earthquake Impact on Tech Giants

The 7.4 magnitude earthquake prompted a tsunami warning for Southern Japan and the Philippines. However, the alert was later lifted. In the aftermath, TSM, a key supplier for tech giants such as Apple (NASDAQ:AAPL) and NVIDIA (NASDAQ:NVDA), announced it had paused chipmaking and undertaken evacuation at some fabrication facilities. United Microelectronics (NYSE:UMC) has also halted production at some plants and undertaken evacuation. Meanwhile, TSM said it was assessing the impact of the disruption.

Concerns about Global Supply Chain

The production stoppage at TSM has sparked concerns regarding disruptions to the global chip supply chain. Taiwan plays a significant role in meeting the increasing global demand for chips that fuel various devices, from iPhones to the latest LLM models.

As a result, industry participants are cautious about maintaining steady supply chains and avoiding overly concentrated production in specific geographic locations. Recently, TSM has expanded its reach by opening an advanced chip packaging facility in Japan.

Similarly, Intel (NASDAQ:INTC) and Samsung (GB:SMSN) (OTC:SSNLF) are venturing into the Japanese market. This trend reflects a broader industry initiative to reduce dependency on geographically concentrated production hubs.

Is TSM a Buy, Sell, or a Hold?

Today’s price decline comes after a nearly 65% jump in TSM’s share price over the past six months. Overall, the consensus rating for TSM remains a Strong Buy alongside an average TSM price target of $154.14.

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