The boom in the artificial intelligence industry is causing major shifts in the market, with Taiwan Semiconductor Manufacturing Company (TSMC) recently achieving a significant milestone by joining the elite trillion-dollar market capitalization club. This feat places the company among the world’s top tech giants and showcases the growing importance of the semiconductor industry.
TSMC’s market capitalization briefly surpassed Tesla’s, making it the seventh most viable tech company across the globe. The company’s shares have witnessed a remarkable increase, trading above the 50-day moving average of $158.00 and reaching a new 52-week high of $192.80. Year-to-date, TSMC shares have gained nearly 80%.
The semiconductor industry has become the leading sector, driven by the increasing demand for chips used in AI tech. Global semiconductor sales are said to reach $611,2 billion this year, with a 16% boost in sales expected for that year, followed by a 12.5% increase in 2025. This surge in demand is mainly because of the advancements in gen AI, which require sophisticated and powerful chips.
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Boom In AI Helped TSMC Grow Immensely
The US government has recognized the critical role of semiconductors in the modern economy, providing substantial support to boost domestic chip manufacturing. The Biden administration has allocated tens of billions for creating chip factories in the US with an aim to boost technology infrastructure and reduce reliance on foreign manufacturers.
Analysts have raised their price targets for TSMC ahead of its second-quarter earnings report, with Morgan Stanley predicting an increase in the company’s full-year sales forecast. TSMC’s effective “hunger marketing” strategy hints at tight foundry supply next year, encouraging customers to recognize TSMC’s value.
The anticipated boost in water prices due to AI advancements further boosts the company’s position. For investors, key considerations include revenue growth, profitability, and valuation compared to its rivals.
The AI boom is reshaping the market, with TSMC’s entry into the elite club marking a significant milestone. The semiconductor industry’s growth, driven by AI demand, showcases the crucial role of companies like TSMC and Nvidia in the global market.
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TSMC Ruled Out Huawei China From The Semiconductor Race
TSMC, the world’s largest semiconductor company, believes Huawei China and other budding competitors won’t be able to cause any trouble to its business. TSMC is undoubtedly leading the process technology and the development of top-tier semiconductors.
Major rivals such as Intel Foundry and Samsung have tried to bridge the gap, but despite their efforts, TSMC has managed to maintain its dominance, thanks to its vast experience along with great relationships with established clients such as Apple and NVIDIA.
Similarly, in the company’s annual shareholder meeting held a few days ago, TSMC’s Chairman, Mark Liu, claimed that Huawei and similar firms are no threat to the firm’s consolidated positions in the market.