Nvidia is not the only tech company reaping huge benefits from the AI boom, as Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading contract semiconductor manufacturer, has also seen a significant surge in the market.
TSMC's market capitalization briefly surpassed $1 trillion recently, driven by unprecedented global demand for advanced processors. This milestone could be further consolidated later this month when TSMC reports its quarterly earnings.
TSMC makes processors for the world's leading chip designers, including Apple, Intel, Nvidia, AMD and Qualcomm. These processors are in high demand, often leaving TSMC without any real competition.
Expectations are high
Unsurprisingly, TSMC's recent surge in market value is largely due to rising demand for AI semiconductors, a market that TSMC says is expected to grow by 250% this year.
It's fair to say the chip company is having a big year in 2024. In April, it was forced to evacuate workers and suspend operations after Taiwan was hit by the strongest earthquake in a quarter-century, and then a few days later it was awarded $6.6 billion as part of the CHIPS and Science Act to fund domestic semiconductor manufacturing on American soil.
Although TSMC’s market cap has since fallen to $982.37 billion, it achieved historic status by becoming the first Asian company to reach a market cap of $1 trillion. It currently ranks eighth on the list of the world’s largest companies, behind Meta in seventh place with $1.348 trillion. Interestingly, Intel has a market cap of “only” $145.98 billion, putting it far behind at 97th place.
There are high expectations that TSMC's stock and market cap will rise following the announcement of its Q2 2024 financial results. The company is expected to enjoy even higher revenues in the second half of the year because, as Tom's Hardware Store He says, “Companies like Apple, AMD and Intel are increasing production of their latest processors starting in the second quarter.”
