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TSMC's Japanese Expansion Sparks Local Boom Amid Tariff Woes and Stock Concerns

Mover TrackerMonday, Feb 3, 2025 5:37 pm ET
1min read

Recent developments surrounding Taiwan Semiconductor Manufacturing Company (TSMC) highlight significant industrial shifts. Notably, TSMC’s investment in Japan is creating notable magnetic effects. The company's first plant in Kumamoto began mass production in December, and a second facility will start construction soon. Together, these plants represent an investment exceeding three trillion yen. Neighboring the TSMC site, Sony Group is also constructing a new plant for image sensor production, while TEL, Japan's leader in semiconductor equipment, is setting up a new R&D building nearby, transforming the area into a globally recognized industrial hub.

Beyond attracting technology firms to establish factories, the presence of TSMC's facilities has spurred the construction of hotels and residential buildings, contributing to rising local property prices, which are now among the highest in Japan, and enhancing population growth in the region.

In the backdrop of these local developments, international trade tensions cast a potential shadow. Despite former President Trump's tariffs not directly targeting Taiwan, the looming threat of a 100% tariff has caused concern among Taiwanese industries. The announcement of potential tariffs could dampen TSMC's stock, and if enacted, might press TSMC to expand its capacities in its U.S.-based facilities.

Given that American customers comprise approximately 60%-70% of TSMC's revenues, additional U.S. tariffs would elevate the costs for chip customers. A 100% tariff could lead to a scenario where import costs of Taiwanese semiconductors surpass the cost of chips produced in TSMC’s U.S. facilities, traditionally priced 10%-20% higher than Taiwanese counterparts. This scenario may compel companies like Apple, NVIDIA, AMD, and Qualcomm to push TSMC towards boosting its U.S. production capacity, potentially affecting TSMC's profit margins.

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AGNES MORALES
02/04

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InevitableSwan7
02/04
@AGNES MORALES Fair enough
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birdflustocks
02/03
Local boom in Japan is lit. TSMC's impact on real estate is wild. Anyone else seeing parallels with $TSLA's effect on local economies?
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fgd12350
02/03
100% tariff threat feels like a plot twist. TSMC's US capacity might get a boost. What's your call on $TSMC's margins?
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Mylessandstone69
02/03
Sony's image sensor plant nearby is a power move. TSMC's presence attracts big players like a magnet. What's your take on the region's future?
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PunishedRichard
02/03
@Mylessandstone69 Totally agree, Sony's move is solid.
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Pushover112233
02/04
@Mylessandstone69 What's your take on TSMC's US expansion?
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stertercsi
02/03
Regional property prices skyrocketing? Seems like TSMC's bringing that California vibes to Japan. Anyone else seeing a potential bubble? 🤔
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MyNi_Redux
02/03
TSMC's US customers are heavy hitters. A tariff war could shake up the market. Diversification anyone?
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1kczulrahyebb
02/03
TSMC's stock might face pressure if tariffs rise. Long-term hold here. I'm banking on TSMC's resilience and strategic expansions.
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Puzzleheadbrisket
02/03
TEL setting up shop near TSMC is a win-win. Japanese tech collab is something to watch. Who's eyeing TEL for potential gains?
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Virtual_Information3
02/03
@Puzzleheadbrisket Think TEL's stock will pop?
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yeahyoubored
02/03
TSMC's Japan move is like a semiconductor cheat code. Who else is betting big on $TSMC?
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