Taiwan's TSMC reaches record high on strong Q2 revenue amid AI boom

TSMC hits fresh high: Taiwan Semiconductor Manufacturing Co (TSMC) reached a record high on Thursday following robust second-quarter revenue, driven by booming demand for AI applications. The success has solidified TSMC's position as Asia's most valuable company, with its market value surpassing the trillion-dollar mark this week.

The global AI frenzy has fueled a rally in chipmaker stocks, and TSMC, the world's largest contract chipmaker, has significantly benefited. TSMC's clientele includes AI giant Nvidia and Apple, both of which are seeing increased demand for AI-capable chips. Foreign investors have invested $4.8 billion in Taiwan's stock market this year, primarily influenced by TSMC's performance. Despite this, Asian funds, according to HSBC, remain underweight on Taiwan, indicating potential for further investment inflows.
In numbers

TSMC's shares have surged nearly 80 per cent this year, far outpacing the Taiwan SE Weighted Index, which has risen 35 per cent. On Thursday, TSMC's Taipei-listed shares climbed more than 2 per cent to a record T$1,080, bringing the company's market value to T$28 trillion ($861 billion), making it Asia's most valuable publicly listed company.

TSMC's American Depositary Receipts (ADRs), first listed on the NYSE in 1997, jumped 4.8 per cent to a record $192.79 on Monday, briefly elevating the company's market value to $1 trillion. The ADRs closed at $191.05 on Wednesday. TSMC is set to report its full second-quarter earnings on July 18.

AI-focused companies, especially chipmakers, have experienced significant gains this year. In June, companies like Nvidia, Microsoft, and Apple all saw their market values exceed $3 trillion. TSMC's strong results have boosted global chip stocks, with the Philadelphia semiconductor index rising 2.4 per cent to a record on Wednesday.

"Optimism continues to grow around AI-related demand and potential pricing powers, as TSMC's position as a 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."

(With Reuters inputs)