TSMC Shares Surge 5.63% on AI Demand and 2nm Innovations
1min read As the new year commenced, Taiwan Semiconductor Manufacturing Company's (TSMC) stock exhibited impressive performance. On January 3, the semiconductor giant’s shares rose 3.49%, achieving a two-day surge of 5.63% and reaching its highest intraday share price since October 2024. This growth reflects market confidence in TSMC's potential future advancements.
Recent developments include TSMC's initiation of small-scale production at its two 2-nanometer wafer fabs in Taiwan, with a current monthly output of 5,000 wafers set to expand to 80,000 by 2026. This enhancement aims to better serve major clients like Apple, Qualcomm, and NVIDIA, affirming TSMC’s global leadership in chip manufacturing. Furthermore, the introduction of a new service named "CyberShuttle" to reduce customer production costs illustrates TSMC's commitment to adding value within the industry chain.
Financial analysts remain optimistic about TSMC's future. Notably, NVIDIA's demand for TSMC’s products is expected to rise significantly and could surpass Apple as its largest customer. Projections for 2025 indicate NVIDIA might contribute up to 20% of TSMC's revenue, potentially reshaping the company’s income structure and highlighting vast opportunities within the AI sector. The growth in AI chips and ASICs is anticipated to be a significant factor in TSMC's ongoing development.
Regarding financial performance, TSMC's revenue in the last quarter is predicted to exceed market expectations, thanks to robust demand for its 3nm and 5nm processes. Analysts highlight TSMC’s advancements in CoWoS advanced packaging technology and capacity expansion plans in Arizona as drivers for the sustained demand for its chips over the next 12 to 18 months.
While TSMC’s collaboration with Apple continues to yield substantial revenue, market experts suggest NVIDIA could soon eclipse Apple as TSMC’s principal customer, mainly due to the accelerated demand for AI-related chips. By the end of 2025, a majority of AI chips are expected to utilize TSMC’s 3nm technology, enhancing the average selling price of wafers and bolstering profitability.
Overall, TSMC’s technological advancements, rising customer demand, and cost management strategies strongly support its stock performance. Investors may focus on future developments in 2nm and 3nm processes and changes in major client orders, such as those from NVIDIA and Apple, which will continue to impact TSMC’s market standing. Given TSMC's robust growth trajectory, long-term investment might yield potential capital gains.
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