The surge propelled Taiwan’s benchmark index to a record high. TSMC last week reported a 7.9% rise in January sales, offering the latest sign of a long-awaited recovery in global consumer electronics demand.
At the same time, investors continue to pile into companies expected to ride a wave of activity in AI development that accelerated after OpenAI rolled out ChatGPT. The Philadelphia Stock Exchange Semiconductor Index climbed to a new high recently, while Nvidia’s market capitalization has soared to around US$1.82 trillion — surpassing Amazon.com Inc. and Alphabet Inc.
“Taiwan’s been driven by tech, especially the AI theme,” said Xin-Yao Ng, an investment director for Asian equities at abrdn. “Nvidia has been a catalyst adding on to the sentiment, after Jensen Huang visited Taiwan, boosting investors’ appetite for AI value chain plays and Nvidia suppliers.”
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The migration to bigger ChatGPT-like large language models should boost demand for higher-end chips, which benefits TSMC’s leading-edge foundry business, Morgan Stanley analysts including Charlie Chan wrote this week.
In January, TSMC executives said they expect a return to solid growth this quarter and gave themselves room to raise capital spending in 2024, suggesting the world’s most valuable chipmaker anticipates a recovery in smartphone and computing demand.
The Taiwanese company’s outlook comes after a years-long slump in tech demand. Executives also spent a chunk of time talking about the potential catalysts from AI training and development, which requires the powerful chips that TSMC excels at fabricating.
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Executives from the company met with Nvidia CEO Huang last month to discuss AI chip supply constraints, a major challenge to the industry.
