tsmc adr surges 5% despite local stock lagging

tsmc adr surges 5% despite local stock lagging

2024-12-04 tsmc

Taipei, Wednesday, 4 December 2024.
Taiwan Semiconductor Manufacturing Company’s American Depositary Receipt (ADR) witnessed a significant rise of over 5%, while its stock on the Taipei exchange only grew by 1.93%. This disparity highlights the increasing optimism among international investors towards TSMC. The ADR’s performance suggests a stronger positive sentiment in global markets compared to the local perception in Taipei. Experts attribute this gap to various market dynamics and investor expectations. The difference indicates a premium placed on TSMC’s ADR, reflecting foreign investors’ confidence in the company’s future prospects. This development comes amidst a backdrop of mixed global market trends and economic indicators, underscoring the complexities of international investment sentiments. The rise in TSMC’s ADR showcases its appeal beyond the domestic market, positioning it as a favorable option for global investors seeking growth in the semiconductor industry.

Market valuation and global positioning

TSMC’s market capitalization stands at $1.031 trillion[1], securing its position as the world’s ninth most valuable company. The semiconductor giant’s ADR premium, now exceeding 20%[2], reflects strong international confidence. This valuation comes as global markets show mixed signals, with the Nasdaq and S&P 500 reaching new record highs[2].

Federal Reserve influence

The surge in TSMC’s ADR coincides with Federal Reserve officials signaling potential interest rate cuts. John Waller’s indication of support for rate reduction[2] has contributed to a weakening U.S. dollar, with the dollar index dropping 0.2% to 106.21[2]. This monetary policy shift could enhance TSMC’s attractiveness to international investors.

Regional market context

The broader Asian market context shows volatility, with South Korea’s KOSPI experiencing a 2.3% drop before recovering to a 1.71% decline[2]. Against this backdrop, TSMC’s performance on the TAIEX helped push the index up by 290 points to 23,027[2], demonstrating the company’s significant influence on regional markets.

Manufacturing leadership

As the world’s third-largest semiconductor manufacturer after Intel and Samsung[3], TSMC maintains its position as the largest independent contract manufacturer of semiconductor products. The company has advanced its manufacturing capabilities, completing the transfer and mass production of 5nm technology while developing 3nm and 2nm process technologies[4].

Bronnen


TSMC ADR