TSMC Shares Hit Record High as AI Demand Boosts Chip Industry

By Sherry Qin

Taiwan Semiconductor Manufacturing Co.'s shares have hit a new record high amid positive news across the chip industry as global demand for advanced AI chips surges.

Shares of the world's largest contract chip maker gained 5.15% early Thursday in Taipei to 898 New Taiwan dollars (US$27.79), printing a new high after its U.S.-listed stock jumped 6.85% overnight.

The jump in TSMC shares pushed the benchmark Taiex Index to an all-time high of 21965.39 on Thursday.

The gains follow a rally by shares of Nvidia, a major customer of TSMC's, on Wall Street overnight. Shares of the AI chip maker also hit a record high, rising 5.2% to US$1,224.40 and pushing its market capitalization past US$3 trillion. Nvidia uses TSMC's tech to make the advanced AI chips that the likes of Microsoft and Alphabet are buying in huge quantities to upgrade their data centers.

The Nvidia surge pushed up semiconductor shares elsewhere in Asia as well. In Hong Kong trade Thursday morning, Semiconductor Manufacturing International Corp.--China's biggest chip maker--was up 5.15%, while Hua Hong Semiconductor gained 8.1%.

Investors might also be cheering news that TSMC is in talks to buy advance machinery from Dutch chip-equipment maker ASML.

The Taiwanese company could receive the Dutch firm's latest lithography machine by the end of the year, Jefferies analysts said after hosting a call with ASML's chief financial officer, Roger Dassen.

Intel was the first company to buy one of the machines, which cost about US$381 million and are viewed as cutting-edge equipment for chip makers.

Thursday's gains also come after announcements of a new buyback and a tie-up.

On Wednesday, TSMC said it plans to repurchase 3.25 million shares on the Taiwan Stock Exchange. The buyback is aimed at offsetting stock dilution from shares issued to employees under incentive programs.

Separately, an affiliate of TSMC announced plans to build a US$7.8 billion facility in Singapore to supply chips primarily to automotive and industrial sectors.

TSMC-backed Vanguard International Semiconductor, a specialty contract chip maker, is constructing the facility together with Dutch company NXP Semiconductors.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

June 06, 2024 00:46 ET (04:46 GMT)

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