Chip stocks withstood Monday’s fall in the broader market following a report that a major chip maker will increase its capital spending in 2021 to address a new generation of products.
Taiwan Semiconductor Manufacturing Co. TSM,
It is announced that it will announce a $ 22 billion capital spending plan in 2021 on Thursday, about 10% higher than previously estimated, according to reports in the Taiwanese press. TSMC acts as a manufacturer for major chip companies such as Advanced Micro Devices Inc. I HAVE D,
and Nvidia Corp. NVDA,
which do not have their own manufacturing plants.
TSMC’s US traded shares rose 2.4% month-on-month, while PHLX Semiconductor Index SOX,
closed down 0.4% compared to a 1.5% drop in both the S&P 500 SPX,
and the Nasdaq Comp-Index,
The increase in TSMC’s capital expenditures is expected to support the company’s expansion into 5-nanometer chips, as well as capacity development for even smaller architectures. Currently, companies such as AMD have recently introduced 7 nm chips, while other companies such as Intel Corp. INTC,
they struggled to catch up. In the language of the chip, nanometers or nm, it refers to the size of the transistors entering a computer chip, the general rule being that smaller transistors are faster and more efficient in power use.
In particular, companies that supply materials and equipment used by manufacturers such as TSMC have seen their shares rise on Monday. Lam Research Corp. LRCX,
shares rose 1.2%, KLA Corp. KLAC,
0.6% advanced shares, Applied Materials Inc. Amat,
shares increased by 0.7% and US shares of ASML Holding NV ASML,
gained 2.5%.
Meanwhile, AMD shares gained 0.6%, Nvidia shares rose 0.5%, while Intel shares fell 0.3%.