Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) shares reached a record high on Monday in New York trading, as the world’s largest contract chipmaker is poised to cap its best annual stock performance in 25 years.
The stock climbed as much as 1.4 percent in Taipei yesterday, briefly surpassing its Nov. 8 peak, before erasing the gain to end flat at NT$1,080.
The move came after US chip stocks, including key customer Nvidia Corp, rallied on Monday. TSMC shares are up 82 percent this year amid continued investor enthusiasm for artificial intelligence (AI) trades.
Photo: I-hwa Cheng, AFP
“For us, TSMC remains the best way to play the AI theme without having to pick a winner or a technology, at a reasonable valuation,” said Kevin Net, head of Asian equities at Financiere de l’Echiquier.
The next catalyst to watch would be Nvidia’s presentation at Consumer Electronics Show next month as well as TSMC’s upcoming results and guidance, he added.
With a client list including Apple Inc and Advanced Micro Devices Inc, TSMC has been a major beneficiary of the boom in AI spending. The company is expected to report sales growth of 36 percent for the last quarter of the year, with a gross margin at 58.3 percent, the highest since 2022.
Unlike TSMC, which dominates the high-end chip market, companies specializing in mature IC processes saw strong buying interest yesterday in Taipei, after the US President Joe Biden administration on Monday launched a trade probe into Chinese-made “legacy” semiconductors, with United Microelectronics Corp (聯電), Taiwan’s second-largest contract chipmaker, rising 4.05 percent to close at NT$36.
Additional reporting by CNA
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