• TSMC Shines Amid AI Boom and US Chip Funding, Analysts See 30% Growth in 2024

  • Jan 6 2025
  • Length: 3 mins
  • Podcast

TSMC Shines Amid AI Boom and US Chip Funding, Analysts See 30% Growth in 2024

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  • TSMC Stock Surges on AI Boom and Government Funding Boost

    Taiwan Semiconductor Manufacturing Company (TSM) continues its strong momentum in early 2025, with shares reaching $208.60 in today's trading session, approaching its 52-week high of $211.93. The stock has shown remarkable strength, trading between $203.70 and $208.80 today, reflecting investor confidence in the world's largest contract chipmaker.

    The company's recent securing of up to $6.6 billion in U.S. government funding for its Arizona chip plants has bolstered investor sentiment. This development marks a significant milestone in TSMC's expansion into the American market and strengthens its position in the global semiconductor supply chain.

    Trading volumes have been notably lower than average, with recent sessions showing decreased activity. The final trading day of 2024 saw volumes down 31% compared to the 30-day average, while pre-market and after-hours trading also experienced reduced activity, down 48% and 19% respectively.

    TSMC's strong performance is largely attributed to the ongoing artificial intelligence boom, with analysts projecting substantial growth for 2024. The company is expected to report impressive financial results, with forecasts indicating a net profit of approximately $9.33 billion for the previous quarter. Revenue growth projections for 2024 stand at 33%, while earnings per share are anticipated to grow by 28% year-over-year.

    The company's technology leadership, particularly in N3 and N5 nodes, continues to solidify its market position. However, recent compliance challenges have emerged, as TSMC halted shipments to an unnamed customer after discovering potential violations of U.S. sanctions related to Huawei, demonstrating the company's commitment to regulatory compliance.

    Industry experts note that the current supply/demand imbalance in the semiconductor sector is expected to persist until at least 2026, potentially benefiting TSMC's pricing power and market dominance. The company's beta of 1.24 indicates slightly higher volatility than the broader market, presenting both opportunities and risks for investors.

    With its strong position in AI and high-performance computing, TSMC appears well-positioned to maintain its growth trajectory. The company's projections of nearly 30% growth in 2024 align with broader industry expectations and reflect the ongoing digital transformation across various sectors.

    As the semiconductor industry continues to evolve, TSMC's strategic investments in advanced manufacturing capabilities and its expanding global footprint suggest a robust outlook for the company's future performance. Investors and industry observers remain focused on the company's ability to execute its growth strategy while navigating geopolitical challenges and maintaining its technological edge in the highly competitive semiconductor market.
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