TSMC Slides, Saronic Invests in Texas, GameStop Makes Its Move

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, podcasts, radio, news. Bloomberg Tech is live from the heart of Silicon Valley with Ed Ludlow in San Francisco.

**Ed Ludlow** (0:22)
This is Bloomberg Tech. Coming up, US equity markets drop after TSMC's results, topping expectations, but also spending more to meet AI-related demand, including a bigger commitment to its US buildout. A Saronic makes a $3.2 billion bet on Texas. We speak with the CEO of the Autonomous Maritime Company and Texas Governor, Greg Abbott. And later this hour, Ryan Cohen, CEO of GameStop, joins us to discuss the company's bid for eBay, the future of gaming, and a lot more. Chipmakers are weighing on technology stocks, stocks broadly. The concern is AI spending, the catalyst TSMC's quarterly results. They actually raised the sales outlook, beat across the board, and then said capital expenditures would be higher, not just this year, but for three years. Now the market's kind of recalculating and saying, are we worried about how much higher spending is going to get, and how is it justifying current valuations? These are what the markets look like right now under performance in chip stocks. For what it's worth, TSMC's US listed shares, the ADRs, they're kind of off-session lows, but we are markedly lower. That takes us to today's big number, $265 billion.
That's the total value of TSMC's planned US investment after the chip maker added another $100 billion for just four new semiconductor fabs. Bloomberg Senior Tech Editor Mike Sheppard has more.
$100 billion is a lot more, but it's for just four fabs. That's the reality of the economics of building out infrastructure. What do we need to know about this?

**Mike Sheppard** (2:04)
Well, Ed, this is a number that has been in circulation since the beginning of the year when TSMC indicated to the US that it would be building those four additional plants, bringing the total plan for Arizona to 10 fabs plus two packaging plants over an indetermined amount of time. It takes a long time to construct these facilities and really an even longer time to actually start production and delivering. They began production at the four nanometer process level back in 2024 and the three nanometer process level at a second fab outside Phoenix is only to be ready next year. So we are talking at a more geological terms in terms of time than something immediate and around the corner. But it is a huge commitment and it was driven in part, Ed, by the Trump administration's pressure on Taiwan with tariffs. At the beginning of last year, TSMC had pledged to increase a $65 billion investment agreed under President Joe Biden to $165 billion soon after Trump took office. But that clearly wasn't enough. And we saw them step forward with this commitment under the pressure of tariffs to add another $100 billion to it.

**Ed Ludlow** (3:16)
That's the bit I'm kind of interested in, right? There's a lot of focus on bigger numbers. Sometimes numbers get bigger because the environment is more expensive, right? Inflation on the labor, construction, materials side. Did TSMC tell us anything more about why they're bullish on America?

**Mike Sheppard** (3:34)
Well, in part because if you look back at CEO CC. Way's comments back in June, he is saying that it will take years to meet all the demand for chips that his company makes from US customers. And that's really true across the board. You also heard that in your conversations with the CEO of SK. Hynek, saying that, look, the memory shortage is real and it will be here through 2030 And that is because of the unprecedented demand created by the AI boom. There is so much need for chips and processors to go into all those AI data centers being built across the US and elsewhere in the world. And that's on top of already existing demand for other consumer devices and products. And all of those chips need to be made someplace. TSMC is looking to diversify geographically out of Taiwan, where it principally makes most of its products. And it wants to put more of it here in the US in part as a hedge geopolitically, in part also because, yes, it does need to serve the US customer base more and also recognize that the political pressure here in Washington to expand and invest not only in Taiwan, but other major economies is very strong at.

**Ed Ludlow** (4:46)
Bloomberg's Mike Sheppard. Thank you very much. Let's get more on TSMC's results and bring in Tammy Chu, Berenberg's Head of Tech Equity Research. TSMC hiked its sales outlook, but also boosted its spending plans. For you, Tammy, which was the more important metric?

**Tammy Chiu** (5:03)