Why Taiwan Semiconductor Stock (TSM) Increased Over 45% The Past Month

By Amit Chowdhry ● July 28, 2020
  • Taiwan Semiconductor Mfg. Co. Ltd. (NYSE: TSM) has continued to see its stock price surge this week as it became the 10th most valuable corporation this week. This is why the stock price jumped.

Taiwan Semiconductor Mfg. Co. Ltd. (NYSE: TSM) has continued to see its stock price surge this week as it became the 10th most valuable corporation this week. The company saw its market capitalization surpass $410 billion for a brief period before slightly pulling back again.

Bloomberg pointed out that it has been difficult to overstate Taiwan Semiconductor’s influence on Taiwan’s financial markets. This company alone makes up almost a third of the local benchmark and it has pushed the Taiex past a record that had stood for about 3 decades. Plus the rally of Taiwan Semiconductor’s rally has been attracting foreign flows into Taiwanese equities thus increasing demand for the local currency and the Taiwan dollar increased 1% on Tuesday — which is the strongest since April 2018.

Why did Taiwan Semiconductor Manufacturing see its stock price jump? Intel — one of the company’s largest rivals — warned last week that its 7-nanometer chips are behind schedule so it would have to outsource production. As a result, Intel will be funneling more business to Taiwan Semiconductor due to its strength in silicon fabrication and the ability to make semiconductors for the largest technology companies.

Other semiconductor businesses have also seen their stock prices jump due to Intel’s delay in chips. Samsung’s stock price increased as high as 5.8% on Tuesday. And Semiconductor Manufacturing International Corp. increased 6.6% in Hong Kong. Plus the stock price of AMD also increased by nearly 20% this week.

The position of Samsung Electronics is expected to increase since the Korean electronics giant might be producing Intel’s CPU and discrete GPU. And it was reported earlier this week that Intel already placed orders with Taiwan Semiconductor to buy 180,000 units of 6nm chips for next year.