TSMC is building more factories in Arizona because people keep ordering semiconductors. Wendell Huang told CNBC this represents an acceleration. The company already announced these factories. Now they're announcing them faster.
Huang called it an AI megatrend. Not a trend. A megatrend. Regular trends apparently lack the gravitas required to justify pouring concrete in the desert. The CFO needed a bigger word to explain why a chip manufacturer is manufacturing chips where customers asked them to manufacture chips.
Robust customer demand is the reason. Companies want to buy the thing TSMC sells. TSMC responded by making more of the thing. This counts as news because a CFO said it out loud to a financial journalist who wrote it down.
The Arizona buildout was already happening. It's now happening faster. Speed is the story. TSMC looked at purchase orders and decided to hire more construction workers. Somewhere a retail trader is updating his discounted cash flow model to account for accelerated factory timelines he doesn't understand in a state he's never visited.
Every semiconductor company is building factories. Every CFO is calling it a megatrend. Every financial network is airing the interview. Every day trader is convinced this 90-second clip contains alpha he can trade on before market close.
The factories will open in two years. The AI megatrend will be called something else by then. The customer demand will be for whatever comes after AI. And Wendell Huang will give another interview explaining why TSMC is accelerating the next buildout to capitalize on whatever prefix they attach to trend.
Your technical indicators don't care that Arizona is getting more fabs.
Photo by on Unsplash
Leave a Comment