tsmc stock gains momentum: a buying opportunity?

tsmc stock gains momentum: a buying opportunity?

2025-03-17 tsmc

Taipei, Monday, 17 March 2025.
taiwan semiconductor manufacturing company (tsmc) is showing positive signs on the taiwan stock exchange today. early trading data reveals a notable increase of 1.98% from its previous close, with the stock price reaching a high of 985. with transactions currently at 978, this upward trend might signal a potential entry point for investors. the question remains: can this momentum be sustained, or is it a short-lived rally?

Taiwan Semiconductor Manufacturing Company (TSMC) (2330.TW) is currently experiencing a positive trend on the Taiwan stock exchange [1]. Real-time data from today indicates the stock opened at 977, reached a high of 985, and a low of 973, with transactions at 970 [1]. The change percentage is at 1.15%, reflecting an increase from the previous close of 959 [1]. Investors are advised to closely monitor these trends to identify potential investment opportunities [1].

analyst views on tsmc’s appeal

A consulting organization suggests that TSMC is a compelling choice for long-term investors [3]. TSMC holds a crucial position in the semiconductor industry value chain [3]. The company is also a significant beneficiary of AI infrastructure spending [3]. Furthermore, TSMC’s american depositary receipt (ADR) stock valuation is attractive [3]. These factors make TSMC a worthwhile investment amidst recent stock market fluctuations [3].

tsmc’s strategic importance

TSMC stands as the world’s largest semiconductor foundry, occupying a pivotal role in the industry’s value chain [3]. Most semiconductor companies now outsource their chip manufacturing to third parties like TSMC [3]. Constructing fabs is capital-intensive, time-consuming, and expensive [3]. Fab profitability relies on high-capacity utilization [3]. Advanced chip manufacturing demands complex technologies, pushing foundries to constantly innovate smaller chips [3].

tsmc’s role in ai infrastructure

As a leader in advanced chip processes, TSMC benefits significantly from increased AI infrastructure spending and the growing demand for chips in data centers [3]. Nvidia, Broadcom, AMD, and Apple are among TSMC’s clients [3]. Major cloud computing companies plan substantial AI infrastructure investments this year [3]. Amazon plans to spend $100 billion, Alphabet around $75 billion, and Meta Platforms intends to spend $65 billion [3]. OpenAI’s group plans to invest $500 billion in U.S. data centers over the next few years to support the ‘Stargate’ project [3].

concerns over taiwan investments

Taiwan’s administrative head,卓荣泰, stated that Taiwan’s investment dependence on mainland China has decreased to 7.5% of total foreign investment [4]. To move away from the ‘red supply chain,’ the government will continue to manage investments in China and promote establishing ‘non-red democratic supply chains’ with allied countries to ensure economic security [4]. These allied countries include the U.S., Japan, Germany, and the Philippines, focusing on sectors like semiconductors, ICT, and auto components [4].

tsmc’s global expansion and its impact

TSMC’s overseas investments in locations like Japan, Germany, and the U.S. are expanding [4]. This shift raises questions about whether TSMC’s investments abroad have reduced the proportion of Taiwanese investment in mainland China, or if government policies restricting investments in China are responsible [4]. In 2024, Taiwanese investment in mainland China still reached $3.65 billion, marking a 20% annual increase [4]. The U.S. received the most investment at $14.13 billion, followed by the British Virgin Islands, Singapore, and Japan [4].

challenges and shifts in strategy

Analysts predict that TSMC’s increasing production costs in the U.S., Japan, and Germany will affect its profit margins [4]. This concern is reflected in the recent decline of TSMC’s stock price, which fell below 1,000 yuan to 959 yuan last week [4]. Despite TSMC’s chairman vowing to continue building 11 production lines in Taiwan, concerns persist [4]. The shift in strategy has led to a cooling of the ‘TSMC residence’ real estate market, with investors anticipating price corrections in areas where TSMC has factories [4].

intel’s new ceo and potential tsmc collaboration

Intel has appointed 陈立武 as its new CEO, effective March 18, 2025, leading to a more than 10% surge in Intel’s stock price [6]. There are rumors that TSMC has proposed a joint venture to Nvidia, AMD, and Broadcom to operate Intel’s foundries, with TSMC holding less than 50% [6]. 陈立武 has strong relationships with TSMC executives, which may help solve Intel’s foundry issues [6]. He may streamline Intel’s operations and bring back talented former employees [6].

factors affecting tsmc’s stock

The Taiwan stock market experienced a downturn in March, with a sharp decline of 1085 points in ten trading days [7]. Foreign capital selling triggered market panic, affecting TSMC’s stock price, which fell below its annual line [7]. From March 10 to 14, foreign investors withdrew 126.051 billion yuan, and TSMC’s sell-off approached 44.6 billion yuan [7]. The market is concerned about TSMC’s investment in the U.S. and its potential impact on the Taiwan market [7].

Bronnen


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