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WHY
IT'S IMPORTANT
The AI frenzy has sparked a rally in chipmaker stocks across the
globe. Taiwan Semiconductor Manufacturing Co (TSMC), the world's
largest contract chipmaker, whose customers include AI poster
child Nvidia, has especially benefited from the soaring demand
for AI-capable chips.
Foreign investors have poured $4.8 billion so far this year into
Taiwan's stock market, which is dominated by TSMC. Asian funds,
however, according to HSBC, still remain underweight on Taiwan,
suggesting there could be room for further inflow.
BY THE NUMBERS
Shares of TSMC, whose customers also include Apple, have jumped
nearly 80% this year, widely outperforming the benchmark Taiwan
SE Weighted Index, which is up 35%.
On Thursday, TSMC's Taipei-listed shares rose more than 2% to a
record T$1,080, taking the company's market value to T$28
trillion ($861 billion) and making it Asia's most valuable
publicly listed company.
TSMC's ADRs, first listed on the NYSE in 1997, jumped 4.8% to a
record $192.79 on Monday, briefly boosting the firm's market
value to $1 trillion. On Wednesday, the ADRs closed at $191.05.
TSMC is due to report its full second-quarter earnings on July
18.
CONTEXT
AI-focused companies, mostly chipmakers, have had a good run
this year and saw big gains in market capitalization in June.
Nvidia briefly overtook Microsoft last month to become the
world's most valuable company. Nvidia, Microsoft and Apple all
have market values above $3 trillion.
TSMC's strong results lifted global chip stocks, with the
Philadelphia semiconductor index rising 2.4% to a record on
Wednesday.
QUOTE
"Optimism continues to grow around AI-related demand and
potential pricing powers, as TSMC's position as leading foundry
supplier should elevate earnings in 2025," said Daniel Tan,
portfolio manager at Singapore-based Grasshopper Asset
Management.
"In an industry facing increasing tight supply, TSMC's value has
to appreciate further in 2025 as customers bid to get sufficient
capacity allocation."
($1 = 32.5490 Taiwan dollars)
(Reporting by Ankur Banerjee and Rae Wee in Singapore; Editing
by Vidya Ranganathan and Tom Hogue)
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