Shares against chips resisted the wider market on Monday after a report that a major chip maker will increase its capital expenditure in 2021 to address a new generation of products.
Taiwan Semiconductor Manufacturing Co. TSM,
will reportedly announce a $ 22 billion 2021 capital expenditure plan, about 10% higher than previously estimated, at an event on Thursday, according to Taiwanese media reports. TSMC acts as a manufacturer for large chip companies such as Advanced Micro Devices Inc. AMD,
and Nvidia Corp NVDA,
which do not have their own manufacturing plants.
TSMC’s US traded shares rose 2.4% on Monday, while the PHLX Semiconductor Index SOX,
closed at 0.4%, compared with a decrease of 1.5% in both the S&P 500 index SPX,
and technical Nasdaq Composite Index COMP,
TSMC’s capital expenditure increase is expected to support the company’s expansion into five nanometer chips and develop the capacity for even smaller architectures. Currently, companies like AMD have recently introduced 7 nm chips, while other companies like Intel Corp. INTC,
struggled to catch up. In disk language, nanometers or nm refer to the size of the transistors that go on a computer chip, with the general rule that smaller transistors are faster and more efficient at using power.
It is especially important that companies that supply the materials and manufacture the equipment used by manufacturers such as TSMC raised their shares on Monday. Lam Research Corp. LRCX,
shares rose 1.2%, KLA Corp. KLAC,
shares advanced 0.6%, Applied Materials Inc. AMAT,
shares rose 0.7% and US shares of ASML Holding NV ASML,
2.5%.
Meanwhile, AMD shares rose 0.6%, Nvidia’s share rose 0.5% while Intel shares rose 0.3%.