TSMC Rides High on AI Demand and U.S. Backing Amid Global Expansion
1min read TSMC (Taiwan Semiconductor Manufacturing Company) has recently experienced fluctuations in its stock market performance. As of last week, the company's stock price decreased by 1.22%, though it recorded a 3.3% rise over a week and a 12.35% increase since the beginning of the year, bringing its market capitalization to approximately $1.15 trillion. On Wednesday, TSMC shares saw a significant jump of over 2%, reaching an all-time high at $223.54. This surge came in the wake of an update from TSMC following a magnitude 6.4 earthquake near its facilities in Taiwan, which resulted in minimal damage and temporary suspension for safety inspections. Operations at the affected sites have since resumed normally.
In a recent fiscal year-end meeting, TSMC made several forecasts and shared insights about its business trajectory. The company anticipates moderate growth in the PC and smartphone sectors this year, with Artificial Intelligence expected to be a key driver of demand, projecting a 20% compound annual growth rate for the next five years. TSMC is also advancing its Arizona facility, with the first plant beginning volume production and the second plant reaching the infrastructure completion stage. Plans for a third plant are underway, highlighting TSMC's global expansion strategy and its commitment to providing advanced manufacturing capabilities outside of Taiwan.
Amid growing global competition, TSMC has received significant financial backing from the U.S. under the CHIPS Act, aimed at bolstering domestic semiconductor production. The company has been promised $66 billion to support its Arizona expansion efforts. TSMC's CFO Wendell Huang noted receiving an initial $1.5 billion from U.S. support in Q4 of last year, emphasizing TSMC's strategic importance to the American semiconductor industry. The company expects continued governmental backing as it reaches specific construction and production milestones.
Despite U.S. political developments, TSMC maintains robust communication with the U.S. government, revealing a strong partnership across federal, state, and municipal levels. TSMC's CEO highlighted the company's ongoing positive relations during its earnings call following record-breaking profit announcements in Q4, driven largely by high demand for AI chips.
TSMC's advancements in AI and semiconductor technology are set to transform its manufacturing processes and drive future revenue growth. The company is prioritizing innovation in AI chip production and thereby meeting the increasing technological demands globally, indicating a progressive outlook for both immediate and long-term operations.
