TSMC (NYSE:TSM), the world’s leading contract chip manufacturer, is poised to make a critical decision this week regarding its potential investment in the initial public offering (IPO) of chip designer Arm Holdings, as confirmed by Chairman Mark Liu on Wednesday.
Speaking during the SEMICON Taiwan summit, Liu expressed optimism about the operations at TSMC’s sprawling plant located in Arizona, USA, emphasizing substantial improvements and his confidence in the facility’s eventual success.
Liu stated, “Arm is an integral part of our ecosystem, technology, and our customers’ ecosystem. We are committed to its success and overall health, that’s our primary objective.”
When asked about the timing of the decision, he responded with “this week,” indicating that Taiwan Semiconductor Manufacturing Co Ltd (TSMC) is currently assessing the situation.
Arm Holdings, a subsidiary of SoftBank Group (9984.T), initiated its IPO roadshow on Tuesday, aiming to convince investors of its valuation of up to $52 billion, marking this year’s most significant share sale.
Notably, Arm has already secured major clients as cornerstone investors for its IPO, including tech giants like Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA), Alphabet (NASDAQ:GOOGL), Advanced Micro Devices (NASDAQ:AMD), Intel (NASDAQ:INTC), and Samsung Electronics (005930.KS).
Addressing concerns about the progress at TSMC’s Arizona plant, primarily related to a shortage of skilled workers, Liu remained sanguine about the facility’s prospects. He remarked, “I visited Arizona just last month. Any new project on such fertile ground will naturally have a learning curve. Over the past five months, we’ve witnessed tremendous improvements. I’m confident it will be a highly successful project.”
Earlier in July, TSMC had announced a delay in the start of production at its first chip fabrication facility in Arizona, originally slated for next year, but now rescheduled for 2025 due to the shortage of specialized workers. To bridge this gap, technicians from Taiwan are being dispatched to train local staff. The investment in this project amounts to a substantial $40 billion, aligning with Washington’s objectives to bolster domestic chip production.
In addition to its U.S. venture, TSMC is making a significant overseas move by investing 3.5 billion euros ($3.76 billion) in a factory located in Germany, with a primary focus on serving the automotive industry. Germany, renowned for its prominent car manufacturers like Volkswagen, serves as an ideal hub for this endeavor. Liu confirmed ongoing efforts to secure subsidies from the German government and the European Union, characterizing the process as proceeding smoothly.
TSMC’s shares experienced a marginal decline of 0.4% on Wednesday, mirroring the broader index (TWII) performance.
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