TSMC’s $100B Bet: US-China Chip War Heats Up

• TSMC’s $100B US chip blitz. Trump confirms massive investment, sparking tech sector surge.
• Undervalued TSM? 91.6% potential upside despite market fears, analysts say buy now.
• China AI threat? TSM’s expansion counters DeepSeek AI’s rise, secures US tech dominance.

Taiwanese chip manufacturer TSMC is set to inject a whopping $100 billion into US chip manufacturing over the next four years, as confirmed by Donald Trump today. This massive investment aims to boost domestic semiconductor production, addressing both national security and economic concerns.

TSMC’s CEO C.C. Wei revealed plans to build three new manufacturing plants in Arizona as part of their existing $65 billion commitment. Besides providing local employment, this expansion directly benefits tech giants like AMD, NVIDIA, Apple, and Broadcom, securing AI chip capacity and supply chains. ASML also stands to gain from increased lithography tool orders.

TSMC’s $100B Bet: US-China Chip War Heats Up 3

TSMC’s strategic investment acts as a key catalyst, signaling confidence in the semiconductor sector. This comes at a critical time, as China’s rapid AI growth, as seen by DeepSeek AI’s meteoric rise, fuels uncertainty in global tech valuations.

DeepSeek AI’s success on a shoestring budget, compared to ChatGPT’s massive valuation, triggered concerns about overvalued US tech stocks. This led to significant sell-offs in giants like NVIDIA and Meta, rippling into the crypto market with Bitcoin’s 5% drop and steeper altcoin declines.

Is TSMC The Undervalued Giant?

While TSMC doesn’t directly compete with DeepSeek as both firms operate at different levels of the tech stack, the former strengthens the supply chain for US AI companies like NVIDIA, which do compete with DeepSeek. In essence, TSMC’s US expansion is a strategic move in the US-China tech rivalry.

Even though it does not directly target DeepSeek, it strengthens the US AI ecosystem and helps counter the competitive threat from Chinese AI firms.

Coming to the $TSM’s intrinsic value overview, the stock is 91.6% undervalued, with a quality rating of 8.4. This suggests a strong potential for growth despite the current market fluctuations. The $100 billion investment further highlights US intention to be a leader in the semiconductor industry, mitigating risks associated with geopolitical tensions and market volatility.