SINGAPORE (Reuters) – Taiwan’s TSMC scaled a file excessive on Thursday after posting robust second-quarter income on booming demand for AI functions, cementing its place as Asia’s most precious firm.
TSMC additionally topped a trillion greenback market worth this week.
WHY IT’S IMPORTANT
The AI frenzy has sparked a rally in chipmaker shares throughout the globe. Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract chipmaker, whose prospects embody AI poster youngster Nvidia (NASDAQ:), has particularly benefited from the hovering demand for AI-capable chips.
Overseas traders have poured $4.8 billion to date this yr into Taiwan’s inventory market, which is dominated by TSMC. Asian funds, nonetheless, in accordance with HSBC, nonetheless stay underweight on Taiwan, suggesting there may very well be room for additional influx.
BY THE NUMBERS
Shares of TSMC, whose prospects additionally embody Apple (NASDAQ:), have jumped almost 80% this yr, extensively outperforming the benchmark Taiwan SE Weighted Index, which is up 35%.
On Thursday, TSMC’s Taipei-listed shares rose greater than 2% to a file T$1,080, taking the corporate’s market worth to T$28 trillion ($861 billion) and making it Asia’s most precious publicly listed firm.
TSMC’s ADRs, first listed on the NYSE in 1997, jumped 4.8% to a file $192.79 on Monday, briefly boosting the agency’s market worth to $1 trillion. On Wednesday, the ADRs closed at $191.05.
TSMC is because of report its full second-quarter earnings on July 18.
CONTEXT
AI-focused firms, largely chipmakers, have had run this yr and noticed large features in market capitalization in June.
Nvidia briefly overtook Microsoft (NASDAQ:) final month to change into the world’s most precious firm. Nvidia, Microsoft and Apple all have market values above $3 trillion.
TSMC’s robust outcomes lifted international chip shares, with the Philadelphia semiconductor index rising 2.4% to a file 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,” mentioned Daniel Tan, portfolio supervisor at Singapore-based Grasshopper Asset Administration.
“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})