Taiwan Semiconductor Will Receive a Huge U.S. Subsidy. Does That Make the Stock a Buy?
The Biden administration announced this past Monday that Taiwan Semiconductor Manufacturing Company (NYSE: TSM) will receive a subsidy of up to $6.6 billion from the federal government to support the company's planned $65 billion investment in building three cutting-edge chip fabrication plants in Arizona. While that sounds like a lot of money, the market's reaction was tepid. The stock rose by just 1% in that day's trading session.
That reaction may leave investors wondering whether this agreement makes TSMC stock a buy or whether it does little to change the stock's value proposition. Let's dive in and see.
The subsidy is a product of the U.S. CHIPS and Science Act, which among other things allocated $53 billion in federal funds to promote the construction of semiconductor fabs on U.S. soil.
Source Fool.com
Taiwan Semiconductor Manufacturing Co. Ltd. ADR Stock
Taiwan Semiconductor Manufacturing Co. Ltd. ADR is currently one of the favorites of our community with 17 Buy predictions and no Sell predictions.
With a target price of 150 € there is a slightly positive potential of 16.46% for Taiwan Semiconductor Manufacturing Co. Ltd. ADR compared to the current price of 128.8 €.
