Chip stocks lagged behind the broader market Monday following a report that Taiwan’s fabrication industry is pessimistic about U.S. efforts to lessen its reliance on foreign capacity, along with a string of downgrades in the analog-chip segment. U.S. shares of Taiwan Semiconductor Manufacturing Co.
fell as much as 6% Monday following a Financial Times article reporting that TSMC believes U.S. efforts to rebuild its domestic fab industry are “doomed to fail.” TSMC is the largest cap component out of 30 on the PHLX Semiconductor Index
which fell nearly 2% Monday morning before paring losses later in the session.
Morris Chang, TSMC founder, said that to U.S. House Leader Nancy Pelosi in stark terms during her visit to Taiwan back in August, according to the report, which said Mark Liu, the company chairman, and Taiwanese President Tsai Ing-wen were in attendance at the meeting. “He was pretty blunt, and the esteemed guests were a bit surprised,” the FT reported, according to an unidentified source who heard Chang speaking to Pelosi. Chang was referring to the $52 billion in funding from the U.S. CHIPS Act that passed to spur U.S. fab capacity, with Intel Corp.
Texas Instruments Inc.
and Micron Technology Inc.
among the main companies believed to benefit. Read: Chip stocks crushed to two-year low as more tech, AI ban to China add to woes The point of the funding is to strategically lessen U.S. reliance on Taiwan, where the majority of the world’s fab capacity is located. Should China …