The computer chip supplier is riding a wave of AI to higher valuation
Nvidia $NVDA isn’t the only chip manufacturer having a great year. Bloomberg reports that TSMC $TSM, the Taiwanese chipmaking giant, is back among the 10 most valuable companies in the world. Based on the Monday evening value of its U.S.-listed shares, it’s worth about $630 billion. It edged out the chipmaker Broadcom $AVGO for the spot.
TSMC has been struggling to find its footing amid a decline in its clients’ business for smartphones and laptops and other kinds of devices. But like other electronic component suppliers, it’s riding a wave of AI hype to a higher valuation, and its stock is up by a third so far this year.
“The surging AI-related demand in 2023 supports our already strong conviction that the structural demand for energy efficient computing will accelerate in an intelligent and connected world,” CEO C.C. Wei said on a January earnings call. “TSMC is a key enabler of AI applications… Thus, the value of TSMC technology position is increasing, and we are all well-positioned to capture the major portion of the market.”
In 2020, TSMC’s importance to the global semiconductor market was underscored when the U.S. recruited it to build a factory in Arizona and tried to cut off the company’s Chinese customers (like Huawei). The move was meant to shore up supplies of the important computer chip component as geopolitical tensions with China have risen and war has threatened to break out between the world’s two largest economies. That factory has struggled immensely to get going because of American labor shortages, but the semiconductor tug-of-war between the U.S. and China continues apace. In February, TSMC opened a factory in Japan for the first time for similar reasons.
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