TSMC’s U.S. fab plans driven by customers, not Intel partnership, Morgan Stanley

Investing.com -- Taiwan Semiconductor Manufacturing (NYSE: TSM) (TSMC) will base its U.S. expansion decisions on customer demand and shareholder value rather than aiding rival Intel (NASDAQ: INTC), according to Morgan Stanley (NYSE: MS).

There are speculation about TSMC’s potential investment in Intel’s U.S. fabs, following reports that the U.S. government is encouraging Intel to spin off its manufacturing operations. However, TSMC has previously stated that it has no interest in acquiring Intel’s fabs or forming a joint venture in the U.S., unlike its partnerships in Japan and Europe.

Morgan Stanley sees further U.S. fab expansion as likely, particularly as TSMC looks to meet domestic customer needs and mitigate tariff risks. The company has already committed to producing its advanced A16 node in the U.S. by 2030.

Regarding U.S. research and development, TSMC may not find it necessary to establish a major R&D presence, given the existing capabilities of Intel and IBM (NYSE: IBM). Meanwhile, expansion in CoWoS packaging technology would depend on key customers like Nvidia (NASDAQ: NVDA) and Amazon (NASDAQ: AMZN) sharing costs.

Morgan Stanley remains “overweight” on TSMC stock, citing its technological leadership and long-term growth potential in AI, while acknowledging that U.S. tariffs and regulatory uncertainties could pose short-term risks.

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