The share price gap between Taiwan Semiconductor Manufacturing Co. (TSMC) and China’s biggest chipmaker is near its widest in almost two decades, highlighting the difficulty Beijing faces in building up its domestic chip industry, reports Bloomberg.
Bolstered in part by state-of-the-art chipmaking capabilities, TSMC has soared 48% this year while Semiconductor Manufacturing International Corp. (SMIC) lost 7.5%, leaving the gap between the two stocks’ annual performance poised to be the biggest since 2005. The chasm comes even as China’s largest semiconductor investment fund, known as Big Fund III, aims to develop the local sector amid US efforts to limit growth.
Boosting SMIC’s technology “is not something that can be achieved overnight, even with abundant funding,” said Shen Meng, a director at Beijing-based investment bank Chanson & Co.