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Taiwan Semiconductor Manufacturing Company (TSMC) has hit a remarkable milestone. The chip maker’s market value briefly surpassed $1 trillion.
This achievement comes as Wall Street analysts raise their price targets for the company. TSMC’s American Depositary Receipts (ADRs) saw a significant jump on Monday.
They rose by 4.8% shortly after the New York Stock Exchange opened. This surge pushed the company’s stock price up by over 80% this year alone.
The Taiwanese chip manufacturer has climbed the ranks of valuable companies. It overtook Berkshire Hathaway in June, becoming the world’s eighth most valuable firm.
This ranking is based on ADRs, which trade at a premium compared to Taipei-listed shares. TSMC’s success stems from its unique position in the tech industry.
It is the sole supplier of crucial chips for tech giants Apple and Nvidia. This makes TSMC a top choice for global investors betting on AI advancements.
TSMC’s Resilience Amid Geopolitical Tensions
The company’s growth persists despite rising tensions in the Taiwan Strait. Many Wall Street firms have increased their price targets for TSMC.
They cite growing AI-related demand and potential price hikes in 2025 as factors boosting earnings. TSMC’s ADRs have outperformed its Taipei shares.
This is because they are more accessible to foreign investors. Unlike Taiwan shares, ADRs don’t require special regulatory approval for conversion to U.S. equivalents.
Analysts are optimistic about TSMC’s future. Morgan Stanley raised its price target by 9%. They expect TSMC to increase its full-year sales forecast in the upcoming earnings report.
The broker also predicts TSMC will raise silicon wafer prices due to its strong bargaining power. JPMorgan analysts also anticipate TSMC will raise its revenue forecasts.
They expect the company to present a more positive outlook on AI accelerator demand. This optimism is shared by other brokers like Nomura Holdings and Mizuho Securities.
TSMC’s revenue growth is projected to reach 36% year-over-year. This would be the fastest pace since the last quarter of 2022. The company’s Taipei-listed shares recently crossed 1,000 New Taiwan dollars.
A year ago, Warren Buffett’s Berkshire Hathaway sold its $5 billion stake in TSMC. This move highlighted geopolitical risks related to China’s claim over Taiwan. Despite this TSMC’s shares have continued to rise in both the U.S. and Taiwan.
TSMC’s trillion-dollar valuation reflects its crucial role in the tech industry. As AI continues to advance, TSMC’s position as a key chip supplier solidifies its importance in the global market.