TSMC Stock Rises as Taiwan Rejects Trump's 50-50 Chip Plan

This article first appeared on GuruFocus.

Oct 2 - Taiwan Semiconductor Manufacturing (TSMC) shares advanced on Wednesday after Taiwan's government said it would not adopt a U.S. proposal requiring American firms to split semiconductor sourcing evenly between domestic and foreign suppliers.

Vice Premier Cheng Li-chiun stated the so-called 50-50 plan was not part of recent negotiations with Washington, though Taiwan continues to seek deeper high-tech cooperation with the United States. The plan, floated by Trump administration officials, would have pushed U.S. companies to buy half of their chips locally and half from overseas partners such as TSMC.

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TSMC stock rose about 2% to $292 in early U.S. trading, extending a 3% gain from the prior session. The company, which produces more than 90% of the world's most advanced semiconductors, supplies major American tech firms including Apple (NASDAQ:AAPL) and Nvidia (NVDA).

The United States currently manufactures around 12% of global semiconductors, according to the Semiconductor Industry Association. Washington has outlined goals to increase production capacity to as much as 40%, though analysts estimate this could require investment exceeding $500 billion.

Taiwan has emphasized it will maintain its core chip manufacturing base on the island while also expanding production abroad. TSMC is investing in new facilities in Arizona and recently committed roughly $165 billion to U.S. projects as part of its long-term global expansion strategy.

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