Shares in semiconductor giant Taiwan Semiconductor Manufacturing Company (TSM), also known as TSMC, lifted today as it announced plans to open a new chip design center in Germany.
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European Support
According to the President of TSMC Europe, Paul de Bot, the Munich Design Center will open during the third quarter this year.
“It’s intended to support European customers in designing high-density, high-performance, and energy-efficient chips with a focus on applications in automotive, industrial, AI, and IoT,” de Bot said.
This builds on existing plans to construct its first major European manufacturing plant in Dresden, Germany, with partners Infineon, NXP, and Robert Bosch.
It’s a significant move both for Europe and TSMC.
Since President Trump returned to office, there has been growing nervousness in Europe about technology security and supply. That’s down to tariffs but also potential export controls on AI.
Global Expansion
Despite ditching the Biden-era AI diffusion rule, Europe is still concerned about Trump’s pullback from the continent in areas such as defense spending and commitments. Perhaps AI technology will be next.
As such it is looking to beef up its own supply of semiconductor chips and accelerate its AI developments and businesses.
For TSMC it continues its global expansion drive with $100 billion in new U.S. facilities, driven by Trump demands, and operations in Japan, as well as Germany. It is down to soaring demand but it is also a way for TSMC to diversify its operations and reduce its vulnerability to tariffs and dependency on Taiwan given the concerns over a possible Chinese military invasion.
Is TSM a Good Stock to Buy Now?
On TipRanks, TSM has a Strong Buy consensus based on 7 Buy and 1 Hold rating. Its highest price target is $251. TSM stock’s consensus price target is $219.43 implying an 14.30% upside.
