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Taiwan’s TSMC Joins Trillion Dollar Club Amid AI Frenzy

TSMC, which is the world’s largest contract chipmaker, has been one of the top beneficiaries of soaring demand for AI-capable chips


The logo of Taiwan Semiconductor Manufacturing Company is seen as people attend the opening of the firm's global R&D centre in Hinschu (Reuters file photo).

 

Taiwan’s computer chip giant TSMC soared to a record high on Thursday after posting strong second-quarter revenue on booming demand for AI applications.

TSMC – Taiwan Semiconductor Manufacturing Company – has confirmed its position as Asia’s most valuable company after the market value of its shares passed a trillion dollars this week.

A frenzy by sharemarket investors has sparked a rally in chipmaker stocks across the globe. And TSMC, which is the world’s largest contract chipmaker, with customers such as leading AI chip designer Nvidia, has been one of the top beneficiaries of soaring demand for AI-capable chips.

 

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Foreign investors have poured $4.8 billion so far this year into Taiwan’s stock market, which is dominated by TSMC.

However, HSBC says Asian funds remain underweight on Taiwan, suggesting there could be room for further inflow.

 

Shares up nearly 80% this year

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.

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.

“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,” Daniel Tan, portfolio manager at Singapore-based Grasshopper Asset Management, said.

“In an industry facing increasing tight supply, TSMC’s value has to appreciate further in 2025 as customers bid to get sufficient capacity allocation.”

 

  • Reuters with additional editing by Jim Pollard

 

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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years.

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