TSMC's Stock Soars Amid WWII Bomb Discovery and Geopolitical Hurdles

Recently, TSMC (Taiwan Semiconductor Manufacturing Company) experienced a positive stock market performance, with its share price rising 3.49% over the past week, marking a three-day consecutive increase totaling 6.58%. From the beginning of the year to now, the stock has surged by 24.15%, contributing to a market valuation of approximately $1.262 trillion. This momentum highlights TSMC's strong position as a leading player in the semiconductor industry.

On the operational front, TSMC's construction efforts in Kaohsiung have been met with an unexpected challenge. A World War II-era bomb was discovered at the construction site of a new chip factory. The bomb, believed to be an old American explosive, has been safely removed without incident. TSMC is currently developing five state-of-the-art chip manufacturing facilities in the area, intended to produce chips using 2-nanometer and potentially even more advanced technology. The Kaohsiung site is central to TSMC’s strategic plans, given its role in producing the next generation of chips expected to bolster technological advancement across various sectors.

This recent discovery marks the third time a bomb from WWII has been found at the Kaohsiung construction site, which once served as a refinery. The area, known for its historical significance during the Japanese occupation, was targeted by American forces. Despite the interruptions caused by these findings, TSMC remains on track to commence production at its first plant, P1, by the end of the year.

In light of geopolitical tensions, TSMC also faces regulatory challenges in its operations. The U.S. government has rescinded the "Validated End User" status for TSMC's Nanjing plant, requiring future shipments of U.S.-sourced chip-making equipment to secure individual export licenses. This regulatory change, effective December 31, is part of a broader tightening by the U.S. on semiconductor equipment exports to China. While the move poses potential risks of equipment shortages, TSMC is reportedly taking precautions, such as stockpiling and reallocating resources, to mitigate operational disruptions.

Furthermore, TSMC continues to expand its technological capacities, with plans underway in Chiayi to develop advanced packaging technologies. The planned developments are set to introduce cutting-edge innovations such as CoWoS (Chip on Wafer on Substrate) to enhance the efficiency and performance of AI chips. Despite facing operational challenges and geopolitical complexities, TSMC's continued investments and strategic planning underscore its commitment to advancing semiconductor technology and maintaining its competitive edge in the global market.