TSMC is rumored to be competing for jobs across borders, with ADR rebounding by 6% to challenge the status of Samsung, Micron and SK Hynix

[Financial Channel/Comprehensive Report] TSMC (2330) is rumored to be producing 3D DRAM for Huida to enter the advanced memory market. TSMC's ADR stock price rose by more than 6% in early trading on Friday US time. The market is concerned about whether TSMC can challenge Samsung, Micron and SK Hynix in the memory market in the future?

According to The Information, TSMC is considering producing advanced memory chips at Huida's request. As the memory shortage intensifies competition among leading chip manufacturers, this move may expand TSMC's position in the artificial intelligence hardware market and open up new business opportunities for TSMC.

TSMC's American Depository Receipts (ADRs) rose more than 6% in early trading. Investors are reacting to the possibility that TSMC will expand beyond its core chip manufacturing business into a market dominated by Samsung Electronics, SK Hynix and Micron Technology.

It is rumored that TSMC has begun formulating a production plan for 3D dynamic random access memory (DRAM). It is reported that the plan is related to the needs of Huida, TSMC’s largest customer. The company is considering building a new memory production plant or acquiring an existing semiconductor plant and converting it for memory production.

The move may stem from the growing demand for artificial intelligence hardware that puts pressure on the supply of memory chips. Major tech companies such as Huida and Apple are looking for additional sources of memory.

3D DRAM uses vertically stacked memory cells instead of being arranged in a single-layer horizontal structure like traditional DRAM. This design aims to increase storage capacity and represents a potential new direction for the industry.

TSMC’s plan comes at a time when Micron is expanding its own production capacity. In March this year, Micron agreed to acquire a factory in Taiwan from Power Semiconductor Manufacturing Company for US$1.8 billion and planned to transform it into an advanced memory production line.

A move into advanced memory would put TSMC in direct competition with Samsung Electronics, SK Hynix and Micron, which already have strong positions in the market.

The Information reported that TSMC has patents related to vertical DRAM technology, but it may take several years from research and development to mass production. The memory market also faces cyclical fluctuations in supply and demand, which can affect chip prices and manufacturers' profit margins.

In addition, TSMC has established a cooperative relationship with SK Hynix. According to SK Hynix, the two companies signed a memorandum of cooperation in April 2024 to jointly develop HBM4 memory. SK Hynix plans to use TSMC's advanced logic process to manufacture the basic chip of the memory chip.