Taiwan's giant chip manufacturer, TSMC, made a historic mark when its market capitalization surpassed the $1,000 billion mark after an exciting trading session earlier this week, consolidating its dominant position in the semiconductor industry. Global.
TSMC's stock price listed in the US (ADR) soared nearly 5% in the trading session on July 8, and has increased nearly 80% since the beginning of this year. Previously, in early June, TSMC surpassed Berkshire Hathaway to become the world's 8th most valuable company, based on ADRs value.
According to Phelix Lee, an analyst at Morningstar Inc., TSMC's ADRs approaching a valuation of $1,000 billion is a remarkable feat, especially in the context of the technology industry expected to continue to grow strongly. until at least the 2040s.
TSMC's unique position as the sole supplier of the most important chips to Apple Inc. and Nvidia, two technology "giants" worth $3,000 billion, have made the company an attractive investment choice amid the booming wave of AI development.
Despite escalating geopolitical tensions in the Taiwan Strait, many Wall Street securities firms still raised their price targets for TSMC. They believe that soaring demand for AI chips and potential increases in product prices by 2025 will boost TSMC's profits.
The impressive growth of TSMC ADRs compared to Taipei-listed stocks is explained by easier access for foreign investors and higher liquidity.
Morgan Stanley is one of the organizations that is optimistic about TSMC's prospects. This securities company raised the price target for TSMC shares by about 9% with the expectation that the chip manufacturer will raise its full-year revenue forecast in its business results report next week. Morgan Stanley also predicts that TSMC will increase wafer prices due to its great advantage in negotiations with customers.
“TSMC's 'scarcity marketing' strategy appears to be working,” said Morgan Stanley analysts, including Charlie Chan. According to the latest information, TSMC is sending the message that chip supply will be scarce in 2025 and customers may not receive enough production capacity as desired if they do not appreciate TSMC's value.
JPMorgan also predicts that TSMC will raise its revenue forecast in the upcoming business results meeting. “We expect TSMC to provide a more positive assessment of demand for AI accelerators,” JPMorgan analyst Gokul Hariharan said.
Investor optimism pushed Taiwan-listed TSMC's stock price past the NT$1,000 (about $31) mark last week, amid market expectations that the world's most advanced chipmaker, with major customers such as Apple Inc. and Nvidia Corp., will record 36% year-over-year revenue growth, the fastest increase since the fourth quarter of 2022.
Although affected by Berkshire Hathaway's decision to divest all $5 billion of capital last year, TSMC's shares have proven their strength with impressive price increases in both the US and Taiwan.