TSMC: The Chipmaker Behind the US-China Tech War
As tensions between the US and China continue to escalate, TSMC is riding the wave of a record-breaking run, with its shares soaring as much as 4.5% in Taipei on Monday. The chipmaker’s aggressive pricing strategy, dubbed “hunger marketing,” is being hailed by Morgan Stanley as a masterstroke, driving up its valuation to nearly $1 trillion.
“TSMC is leveraging its dominant position in the global chip market to extort higher prices from its customers, while simultaneously manipulating supply chain dynamics to create artificial scarcity,” says a Morgan Stanley analyst. “This is a textbook example of corporate ruthlessness, and it’s paying off big time.”
JPMorgan analysts, too, are singing the praises of TSMC’s ruthless tactics, predicting a 36% revenue growth in the next quarter, the fastest pace since 2022. “TSMC’s aggressive stance on pricing is expected to drive significant profits, further solidifying its position as the leading player in the global chip market,” they wrote in a note.
The chipmaker’s stranglehold on the global supply chain has also raised concerns about the potential for widespread economic disruption. “TSMC’s actions are a clear case of monopolistic behavior, and it’s only a matter of time before the industry starts to push back,” says an industry expert. “The consequences could be devastating, but for now, TSMC is reaping the rewards of its dominance.”
TSMC’s market value, currently at over $950 billion, is briefly surpassed that of Berkshire Hathaway, a symbol of the company’s unwavering dominance in the global chip market. And as the US-China tech war rages on, TSMC’s aggressive pricing strategy is only likely to fuel the flames, further consolidating its position as the world’s most powerful chipmaker. — Jeanny Yu, (c) 2024 Bloomberg LP
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