Bank of America: If Qualcomm acquires Intel Corporation Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US), it will bring both opportunities and challenges.

Bank of America Corp stated that, with the ongoing developments in the acquisition dynamics of Qualcomm (QCOM.US) and Intel Corporation (INTC.US), Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSMC.US) is also facing potential opportunities and risks. There have been reports that Qualcomm recently approached Intel Corporation regarding an acquisition, but some analysts believe that this deal may be difficult to achieve. Additionally, it has been reported that Apollo Global Management Inc. has proposed to invest $5 billion in the struggling chip manufacturer Intel Corporation. Analysts led by Brad Lin stated that Qualcomm is one of the top five clients of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, contributing revenue between 5-9%. Currently, Intel Corporation outsources about 30% of its wafer manufacturing to Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (contributing 5-9% of revenue to Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR), and plans to reduce this percentage to 20%. If Intel Corporation's Intel Foundry Services (IFS) gains enough support through this deal and executes well in product development, it may slow down the outsourcing to Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR. A key factor to watch is how Qualcomm will utilize IFS if they choose to sell it or integrate it into their own business. Analysts believe that if Qualcomm chooses to sell, Intel Corporation may accelerate the outsourcing process, benefiting Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR. Lin and his team also mentioned that MediaTek, a Taiwanese semiconductor company, may benefit from this potential deal due to the usual execution risks associated with foundries. The analysts noted that the collaboration between Qualcomm and Samsung Foundry in launching the Snapdragon 888 faces significant performance challenges, leading to an increase in MediaTek's (in comparison to Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR) market share in the high-end smartphone SoC sector. The analysts pointed out that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's technological leadership and outstanding execution may continue to provide MediaTek with a competitive edge in chip performance. If the situation changes after the deal, MediaTek can further enhance its industry position benefiting from Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's outstanding performance in foundry services. Furthermore, Lin and his team noted that Qualcomm has been a major customer of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, particularly on advanced nodes. A potential acquisition of Intel Corporation may allow Qualcomm to expand into the x86 and High-Performance Computing (HPC) markets. However, analysts pointed out that Qualcomm's existing relationships with Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR and other foundries on different (ARM) architectures could complicate integration with Intel Corporation, which primarily operates on x86 wafers. This potential deal also faces risks, including regulatory challenges that could delay or prevent the acquisition. Analysts added that these factors, along with Intel Corporation's weakened financial condition, bring uncertainty to the entire semiconductor market. Wall Street analysts have an overall positive average rating for the stock, with a strong buy recommendation.