Street Calls of the Week
Investing.com -- Taiwan Semiconductor Manufacturing (NYSE:TSM) stock fell 2.9% Thursday morning as investors reacted to a newly announced partnership between Nvidia (NASDAQ:NVDA) and Intel (NASDAQ:INTC) that could potentially reduce TSM’s manufacturing dominance.
The decline came after Nvidia and Intel revealed plans to collaborate on developing multiple generations of custom data center and PC products. Intel will build Nvidia-custom x86 CPUs for AI infrastructure platforms and develop x86 system-on-chips that integrate Nvidia RTX GPU chiplets for personal computing devices.
The partnership represents a significant shift in the semiconductor landscape, as Nvidia has traditionally relied heavily on Taiwan Semiconductor Manufacturing for producing its advanced chips. Intel’s manufacturing capabilities could now capture some of that business, particularly as Nvidia commits to a $5 billion investment in Intel’s common stock.
Taiwan Semiconductor has been the world’s leading contract chip manufacturer, with Nvidia as one of its most important customers amid the AI boom. The Intel-Nvidia collaboration signals a potential diversification of Nvidia’s manufacturing strategy, which could impact TSM’s future revenue streams.
The announcement sent Intel shares surging approximately 30% as investors viewed the partnership as validation of Intel’s manufacturing turnaround efforts and its potential to compete more effectively in the AI chip production space.
The news also impacted other semiconductor companies, with Advanced Micro Devices (NASDAQ:AMD) and ARM Holdings (NASDAQ:ARM) each falling 5%. Investors appear concerned that the Nvidia-Intel partnership could reshape competitive dynamics in the semiconductor industry, potentially reducing TSM’s manufacturing role as Intel leverages its own fabrication capabilities