US markets are keenly awaiting more color on Trump’s stance on the “Chips and Science Act” following his public criticism of the costs associated with that bill.
Tariff, he argued during his campaign, could have been a more effective and cost-friendly initiative for onshore chip manufacturing.
Still, Wendell Huang – the chief of finance at Taiwan Semiconductor Mfg. Co. Ltd. (NYSE: TSM) remains convinced that his company will continue to receive funding under the Trump administration.
TSM stock has rallied more than 90% over the trailing 12 months.
Trump has been vocal against the CHIPS act
Huang’s optimism is significant particularly because the President-elect, at one point, even accused Taiwan of stealing the US chip business.
Joe Biden as the 46th President of the United States pledged about $6.6 billion to TSMC in its broader pursuit of onshore chip manufacturing in 2024.
The funding is widely expected to help the Taiwanese firm set up three chip fabrication facilities in Arizona.
Taiwan Semiconductor has already received $1.5 billion under the CHIPS act that helped its first Arizona plant go into production in the final quarter of last year.
And the funding will continue to pour in under the new government to make the second one operational in 2028, according to CFO Wendell Huang.
TSMC is in talks with the US government
TSMC recently reported a record quarterly profit on the back of solid demand for its artificial intelligence chips.
On the earnings call, its chief executive C.C. Wei reassured investors that the company is in “very frank and open communication with the current government and with the future one also.”
Experts also share the company’s optimism since the CHIPS Act has bipartisan support in Washington.
Taiwan Semiconductor, however, did not attend Trump’s inauguration– in line with the company’s tradition of keeping a low profile.
Shares of the multinational semiconductor contract manufacturing and design firm currently pay a dividend yield of 1.17% to appear even more attractive for income investors.
Does TSM stock remain attractive for 2025?
Despite a sharp rally since the start of 2024, Wall Street analysts remain uber-bullish on TSM stock primarily because it sits right at the heart of the ongoing AI revolution.
Myron Xie, for example, dubbed Taiwan Semiconductor the “only game in town for AI chips” in a recent interview as Nvidia and the hyperscalers rely on it for the most sophisticated artificial intelligence products.
Shares of TSMC may be worth owning in 2025 also because the company’s management sees an annualized growth of about 40% in the AI business over the next five years.
More importantly, the Taiwan-based behemoth remains insulated from restrictions the US continues to impose on the export of advanced chips.
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