Send me real-time posts from this site at my email
Motley Fool

Why Taiwan Semiconductor Stock Jumped Today

What happened

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

So what

Intel has been having execution problems for years. Its 10nm manufacturing process was chronically delayed, and the company is still shipping mainstream products built on versions of its 14nm process. The company's latest desktop processors, which launched in the second quarter, are 14nm parts.

Image source: Getty Images.

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

When Intel reported its second-quarter results on Thursday evening, the company disclosed that its 7nm process is behind schedule. Intel said its 7nm CPU product timing has shifted back about 6 months and that yields for the process 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 how much market share AMD steals. Intel's products are still competitive, and the company has retained an advantage when it comes to single-threaded performance. But that advantage is the smallest it's been in years.

Because AMD relies on TSMC to manufacture its processors, AMD's success is TSMC's success. As AMD continues to win market share, TSMC will benefit from the chip company's comeback.

10 stocks we like better than Taiwan Semiconductor Manufacturing
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Taiwan Semiconductor Manufacturing wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of June 2, 2020

Timothy Green has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Taiwan Semiconductor Manufacturing. The Motley Fool recommends Intel. The Motley Fool has a disclosure policy.


Source

Popular posts

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue