Taiwan’s Semiconductor Crown Jewel Shines Brighter Amidst China’s Tech Lag
Taiwan Semiconductor Manufacturing Co. (TSM) is basking in the glory of its unparalleled technological prowess, as China’s National Science and Technology Council Minister Wu Cheng-wen conceded that Taiwan’s advanced semiconductor manufacturing capabilities are at least a decade ahead of China’s. The minister attributed this significant lead to Taiwan Semiconductor’s remarkable progress in 2-nanometer technology.
This admission comes on the heels of previous reports suggesting Taiwan’s three-year lead over China in chip manufacturing. Taiwan Semiconductor is poised to commercialize 2-nm chips by 2025, further solidifying its position as a market leader.
In contrast, Chinese tech giant Alibaba Group Holding (BABA) has been collaborating with U.S.-based Nvidia Corp. (NVDA), despite China’s efforts to promote domestic artificial intelligence (AI) chips from companies like Cambricon Technologies Corp and Huawei Technologies Co. This move is seen as a retaliatory measure against the U.S.’s advanced semiconductor embargo on China, citing national security concerns.
Taiwan Semiconductor continues to reap the benefits of its strategic partnerships with industry heavyweights like Nvidia and Apple Inc. (AAPL). The hyperscalars from Microsoft Corp. (MSFT) remain committed to their AI ambitions, driving up demand for Nvidia chips. The smartphone industry’s anticipated recovery, fueled by the integration of AI features, is also expected to boost Taiwan Semiconductor’s prospects.
Wall Street analysts are bullish on Taiwan Semiconductor, with an average 12-month price target of $234.0. The Street high target stands at $250.0, while the Street low target is $210.0. Notably, all five analysts covering Taiwan Semiconductor have positive ratings, with no neutral or negative ratings.
As Taiwan Semiconductor’s stock continues to soar, up 71.05% year-to-date, the average analyst price target suggests there may be further upside ahead. With its 2-nm breakthrough, Taiwan Semiconductor has cemented its position as a leader in the semiconductor industry, leaving China in its wake.
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