Taiwan Semiconductor Company stock (NYSE:TSM) It rose today even though no company-specific news regarding the stock was released. Instead, investors seemed to react positively to the news that Intel CEO Pat Gelsinger was stepping down over the weekend, apparently following the company’s weak share price during his tenure.
Gelsinger’s departure appears to signal a setback in Intel’s foundry strategy, and TSMC stock rose on the news. As of 1:10 p.m. ET, Taiwan Cicada shares were up 5.2%. Notably, Intel stock also rose today, rising 3.5% at the same time.
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Gelsinger’s trademark initiative as Intel CEO was a push to open up Intel’s foundry business to external customers, essentially mimicking TSMC’s business model. This was also the key to Intel getting billions of dollars in funding from the CHIPS Act.
Mr. Gelsinger announced his goal to make Intel the world’s second-largest contract chipmaker after TSMC, but that goal is now in question as Mr. Gelsinger is no longer at the helm.
It’s unclear what the future holds for Intel Foundry Services, but any delay in its construction or planning will likely benefit TSMC. In a press release announcing Gelsinger’s departure, Intel said there would be no change in leadership for the foundry business.
TSMC dominates the contract chip market with over 50% market share in third-party chip manufacturing and approximately 90% in advanced chip manufacturing. Intel probably emerged as the biggest threat to the company during the Gelsinger administration, but that threat has likely subsided.
Intel is still losing billions of dollars every quarter on its foundry business, and the next CEO may not see this as the same growth opportunity. Either way, today’s announcement from Intel bodes well for TSMC.
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