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TSMC stocks soar

by on18 March 2024

AI mania eclipses geopolitical fears

The AI gold rush is leaving geopolitical jitters in the dust, and Taiwan Semiconductor Manufacturing Co. (TSMC) is leading the charge.

The cocaine nose jobs of Wall Street are gobbling up TSMC shares like there's no tomorrow, betting big that AI's going to be the cash cow of the year. TSMC's got a whopping 90 per cent stranglehold on the semiconductors that make AI tick.

Last year, the stock plummeted 27 per cent. The Oracle of Omaha, Warren Buffett himself, ditched his €4.6 billion stake in TSMC, spooked by the political powder keg that is its home turf. And the plot thickens with Taiwan's new head honcho, Lai Ching-te, cosying up to Uncle Sam, much to Beijing's chagrin.

UBS O’Connor analyst Bernard Ahkong reckons that while geopolitics used to be the bogeyman for chip champs, it's now blowing a gale in their sails.

 "We're just getting started on this semiconductor rollercoaster," he says.

However, there are some issues. TSMC has all its eggs in one basket, right smack in Taiwan. If China throws a wobbly, it's not just TSMC in a pickle—the whole world's chip stash takes a hit.

TSMC's not just king of the advanced chip castle; it's also nabbed more than half the foundry market pie. According to Pictet’s Anjali Bastianpillai saidTSMC's on track to smash its growth goals of 15-20 per cent.

TSMC's raking in the dough, with revenue up 9.4 per cent thanks to the AI frenzy, even as iPhone sales tanked.

The company's shares have performed a phoenix act, soaring over 100 percent from last October's slump, with a little help from its mates at Nvidia.

TSMC is spreading its wings, plotting to open a second fab in Japan and start production in Kumamoto. They're also planting their flag in Arizona with not one but two high-tech facilities, and they've got their eye on Germany, too.

Last modified on 18 March 2024
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