Taiwan Semiconductor Manufacturing (NYSE:TSM) saw its stock decline 2.9% Thursday morning, following news of a strategic alliance between Nvidia (NASDAQ:NVDA) and Intel (NASDAQ:INTC) that could challenge TSM’s leading position in chip manufacturing.
The partnership involves developing multiple generations of custom data center and PC products. Intel will produce Nvidia-specific x86 CPUs for AI infrastructure platforms and design x86 system-on-chips incorporating Nvidia RTX GPU chiplets for personal computing devices.
This move marks a significant shift in the semiconductor industry. Nvidia has historically relied heavily on Taiwan Semiconductor Manufacturing for producing its advanced chips. By partnering with Intel, Nvidia could diversify its manufacturing strategy, potentially redirecting some business away from TSM. Intel’s fabrication capabilities, combined with its $5 billion investment from Nvidia in common stock, further strengthen this new approach.
TSM has long been a dominant player in contract chip manufacturing, with Nvidia among its most critical clients amid the AI surge. The Intel-Nvidia collaboration raises questions about how TSM’s future revenues might be affected as Nvidia explores alternative production options.
The announcement propelled Intel shares up roughly 30%, as investors interpreted the move as confirmation of Intel’s manufacturing revival and its ability to compete more aggressively in the AI chip market.
Other semiconductor companies also experienced volatility: Advanced Micro Devices (NASDAQ:AMD) and ARM Holdings (NASDAQ:ARM) both fell about 5%. Market participants appear concerned that the Intel-Nvidia partnership could reshape competitive dynamics, potentially reducing TSM’s central role in advanced chip production.
Taiwan Semiconductor stock price
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