The entry of chip giant Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) into the elite club of the world’s most valuable companies is further proof that the generative artificial intelligence (AI) revolution is shaking up Wall Street.
TSMC, which is listed in Taipei and New York, on Monday briefly broke the US$1-trillion market capitalization barrier, putting it ahead of Tesla Inc as the seventh-most valuable technology giant on the stock market.
Also on Monday, Alphabet Inc, Apple Inc and Meta Platforms Inc hit all-time highs.
Photo: CNA
The top 10 of the world’s most valuable companies is headed by Microsoft Corp and Apple, closely followed by AI chip designer Nvidia Corp.
Their global stock market valuations exceed US$3 trillion on Wall Street.
Alphabet and Amazon.com Inc, which recently topped the US$2-trillion mark, follow in an ever-changing ranking.
Oil giant Saudi Aramco slipped into sixth place, followed by Meta, TSMC and Tesla.
“The semiconductor industry is now the leading sector in the S&P 500,” CFRA Research analyst Angelo Zino said recently. “It’s taken over the last 15 or 18 months. That shows you how much the world has changed.”
The explosion in worldwide demand for chips, boosted by the rise of computing-intensive generative AI, promises sustained expansion for the industry.
Chipmakers are not only attracting investors, but also a host of government subsidies.
US President Joe Biden’s administration, for example, has granted tens of billions of dollars in financial support over several years to help build chip factories in the US.
Worldwide sales of semiconductors, which include integrated circuits, microprocessors and memory chips, are expected to reach US$611.2 billion this year, a record for the industry, the Semiconductor Industry Association said.
Sales are expected to jump by 16 percent this year and 12.5 percent next year, the association said.
Nvidia, a designer of graphics processing units (GPUs), is the frontrunner of the craze, and has triumphed on Wall Street in recent months.
Nvidia’s GPUs are a crucial component in building generative AI and since the November 2022 launch of ChatGPT, its market capitalization has increased eightfold.
In the middle of last month, the Santa Clara, California-based group even briefly became the world’s most valuable publicly traded company, ahead of Microsoft at US$3.3 trillion.
“Nvidia’s GPU chips are the new gold or oil of the technology sector,” Wedbush Securities Inc analysts said.
For them, Nvidia, Apple and Microsoft are now engaged in “the race for the 4 trillion dollar market valuation.”
TSMC, with most of its factories based in Taiwan, is well-placed to also reap the rewards.
While Nvidia, which only designs chips, but does not manufacture them, remains discreet about its supply chain, it is widely believed that the bulk of its products are manufactured by TSMC.
The Taiwanese giant, which controls more than half of the world’s semiconductor demand, posted first-quarter sales of US$18.87 billion, up 13 percent year-on-year, while net income climbed 9 percent to US$6.97 billion.
As for Nvidia, its quarterly profit reached US$14.9 billion, a sevenfold increase over the previous year, on sales of US$26 billion.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, booked its first-ever profit from its Arizona subsidiary in the first half of this year, four years after operations began, a company financial statement showed. Wholly owned by TSMC, the Arizona unit contributed NT$4.52 billion (US$150.1 million) in net profit, compared with a loss of NT$4.34 billion a year earlier, the statement showed. The company attributed the turnaround to strong market demand and high factory utilization. The Arizona unit counts Apple Inc, Nvidia Corp and Advanced Micro Devices Inc among its major customers. The firm’s first fab in Arizona began high-volume production
VOTE OF CONFIDENCE: The Japanese company is adding Intel to an investment portfolio that includes artificial intelligence linchpins Nvidia Corp and TSMC Softbank Group Corp agreed to buy US$2 billion of Intel Corp stock, a surprise deal to shore up a struggling US name while boosting its own chip ambitions. The Japanese company, which is adding Intel to an investment portfolio that includes artificial intelligence (AI) linchpins Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), is to pay US$23 a share — a small discount to Intel’s last close. Shares of the US chipmaker, which would issue new stock to Softbank, surged more than 5 percent in after-hours trading. Softbank’s stock fell as much as 5.4 percent on Tuesday in Tokyo, its
COLLABORATION: Softbank would supply manufacturing gear to the factory, and a joint venture would make AI data center equipment, Young Liu said Hon Hai Precision Industry Co (鴻海精密) would operate a US factory owned by Softbank Group Corp, setting up what is in the running to be the first manufacturing site in the Japanese company’s US$500 billion Stargate venture with OpenAI and Oracle Corp. Softbank is acquiring Hon Hai’s electric-vehicle plant in Ohio, but the Taiwanese company would continue to run the complex after turning it into an artificial intelligence (AI) server production plant, Hon Hai chairman Young Liu (劉揚偉) said yesterday. Softbank would supply manufacturing gear to the factory, and a joint venture between the two companies would make AI data
The Taiwan Automation Intelligence and Robot Show, which is to be held from Wednesday to Saturday at the Taipei Nangang Exhibition Center, would showcase the latest in artificial intelligence (AI)-driven robotics and automation technologies, the organizer said yesterday. The event would highlight applications in smart manufacturing, as well as information and communications technology, the Taiwan Automation Intelligence and Robotics Association said. More than 1,000 companies are to display innovations in semiconductors, electromechanics, industrial automation and intelligent manufacturing, it said in a news release. Visitors can explore automated guided vehicles, 3D machine vision systems and AI-powered applications at the show, along
RSS