AI Boom Pushes Taiwan’s TSMC to Trillion-Dollar Club

Taiwan’s TSMC rose to a record high on Thursday after reporting robust second-quarter sales on rising AI boom, solidifying its position as Asia’s most valuable business

The AI frenzy has initiated a global rally in chipmaker equities. Nvidia, the AI poster child, is among the customers of Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract chipmaker. TSMC has particularly benefited from the increasing demand for AI-capable processors.

Taiwan’s stock market, which TSMC dominates, has received $4.8 billion in foreign investment thus far this year. Nevertheless, HSBC indicates that Asian funds are still underweight in Taiwan, which implies that there may be additional space for inflow.
TSMC’s shares have increased by nearly 80% this year, surpassing the benchmark Taiwan SE Weighted Index, which has increased by 35%. Apple is among TSMC’s customers.

TSMC’s Taipei-listed shares increased by over 2% to a record T$1,080 on Thursday, elevating its market value to T$28 trillion ($861 billion) and establishing it as Asia’s most valuable publicly traded company.

On Monday, the market value of TSMC’s ADRs, initially listed on the NYSE in 1997, briefly increased to $1 trillion due to a 4.8% increase to a record $192.79. The ADRs closed at $191.05. on Wednesday.

The complete second-quarter earnings of TSMC are scheduled to be reported on July 18. AI-focused companies, primarily chipmakers, have experienced significant market capitalization increases this year, particularly in June.

Last month, Nvidia briefly surpassed Microsoft to become the most valuable company globally. Microsoft, Apple, and Nvidia all have market values exceeding $3 trillion.

TSMC’s robust results bolstered global chip equities, resulting in a 2.4% increase in the Philadelphia semiconductor index to a record high on Wednesday.

Daniel Tan, portfolio manager at Singapore-based Grasshopper Asset Management, stated that optimism regarding AI-related demand and potential pricing powers is rising. TSMC’s status as a prominent foundry supplier is expected to increase earnings in 2025.

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