TSMC shares drop as Intel is willing to invest billions in two new chip factories
As the world is still facing chip shortages due to the pandemic, Intel takes the matter into its hands. Patrick Gelsinger, Intel’s chief executive, announced that it plans to spend $20 billion to build two new plants near existing facilities in Arizona. Despite committing to that amount of money upfront, the company hopes to negotiate with the Biden administration to receive expansion incentives.
By this, Intel is trying to be no longer dependent on other manufacturers to provide the technology and materials for their semiconductors. Moreover, it plans to become a key manufacturer of chips for other companies, besides the processors designed and sold for themselves over time. The new approach comes after the transistor miniaturization race switched to Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung Electronics. The two companies provide chips to Apple, Nvidia, Amazon, and AMD.
However, Intel is not the first company to open plants in Arizona. Last May, TSMC announced that it wants to build its own $12 billion factory.
Following the news, TSMC stock price fell nearly 4%, while Intel gained more than 2%.
Sources: reuters.com, nytimes.com