Trump reiterates tax cut commitment while reducing direct federal stimulus
Reuters recently reached out to us regarding Taiwanese contract manufacturer TSMC possibly taking a controlling stake in chipmaker Intel Corporation’s factories and whether or not the White House would support such a move—article by Arsheeya Bajwa.
🏦It’s to be seen if the White House changes its mind regarding foreign or TSMC ownership in order to make Intel’s manufacturing more relevant and competitive.
🏯SoftBank Group Corp., which is a foreign entity, will play a huge part in the U.S.’s recently announced $500 billion data center buildout, so we know that significant foreign ownership is not necessarily a non-starter.
💲Maybe the U.S.’s new sovereign wealth fund (SWF) could take a partial ownership stake in the JV. Possibly it could work out if TSMC has a large but non-majority stake.
🌊This is a fluid and dynamic situation so I expect a few more reveals and surprises before anything is settled.
QUOTED EXCERPT
“Ironically, enough, TSMC might look for some tariff exemptions in order to make this happen and allow for efficient and effective flow of equipment and materials,” said Michael Ashley Schulman, chief investment officer at Running Point Capital.
ALSO QUOTED in the article was:
Matt Bryson, Managing Director and analyst at Wedbush Securities, “If Intel moves down this path, you focus on being a semiconductor design company. So you end up looking more like a Broadcom or a Marvell or an AMD.”
ADDITIONAL THOUGHTS
💡It is doubtful that TSMC’s and Intel’s manufacturing are completely compatible, and probably parts of Intel’s manufacturing will have to be totally revamped, but TSMC might be the best placed company to do that.
💡For Intel, becoming fabless/eliminating the manufacturing components, would allow them to focus on a more consultative strategy, with an emphasis on chip design rather than manufacturing, expanding its AI and data center portfolio, autonomous driving, and software,…or that segment may be bought by Broadcom or Qualcomm⁉️
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Disclosure: The opinions expressed are those of Running Point Capital Advisors, LLC (Running Point) and are subject to change without notice. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Past performance is not indicative of future results. Forward-looking statements cannot be guaranteed. Running Point is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Running Point’s investment advisory services and fees can be found in its Form ADV Part 2, which is available upon request. RP-25-44
