Bernstein: World needs a TSMC alternative—and this name is best positioned
Investing.com -- Samsung, not Intel (NASDAQ:INTC), is best placed to emerge as the world’s leading alternative to Taiwan Semiconductor Manufacturing Co., according to Bernstein.
In a new note examining Samsung’s reported $16.5 billion chip deal with Tesla (NASDAQ:TSLA), Bernstein said the partnership reinforces its view that “the world needs a leading-logic semiconductor producer in addition to TSMC, and that Samsung…is better positioned than Intel to be the alternative.”
Bernstein analysts noted that while the Tesla AI6 project might eventually expand beyond automotive use, “the annual revenue for Samsung (KS:005930) will peak at US$2-2.5B and the lifetime contribution will be only ~US$8B.”
The firm said that figure is “much lower than disclosed US$16.5B,” though they noted that Elon Musk has suggested the potential is “several times higher,” prompting speculation about applications in robotics or other devices.
Still, for Samsung’s struggling foundry business, the impact could be transformative, according to Bernstein.
“US$16.5B may lift Samsung Foundry revenue by 30-40% and the benefit to profitability should be much more,” the analysts said, noting the unit is currently running at low capacity, especially at its Texas-based Taylor fab.
On the broader industry impact, Bernstein stated that the project would expand the wafer fab equipment (WFE) market “by LSD% at most.”
It added: “The impact on TSMC is negligible,” estimating that Tesla’s current contribution to TSMC revenue is minimal.
“Samsung, with its comparable technologies, better cost structure and, more importantly, the support from a memory business and hence the ability to sustain investment, is better positioned than Intel,” Bernstein concluded.
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