TAIPEI (Reuters) – Taipei-listed TSMC shares hit a record high on Friday after the chipmaker reported better-than-expected third-quarter profits and gave a rosy outlook for strong demand for artificial intelligence.
Shares jumped 6% shortly after the open to NT$1,100 (US$34.25), surpassing the previous record of NT$1,080 set on July 11. This gave TSMC a market capitalization of about US$884 billion, the highest of any listed company in Asia.
However, the company appears to be facing some political uncertainty after US media outlet The Information said the US Commerce Department is investigating whether TSMC is making AI chips or smartphones for Chinese company Huawei, whose access to non-Chinese chips has been severely restricted due to controls. American export.
As the world’s largest contract chip maker, TSMC, whose clients include Apple and Nvidia, has benefited from the trend toward artificial intelligence across a range of industries.
TSMC on Thursday reported a more-than-expected 54% jump in quarterly profit, raised its revenue forecast for this year and said the next five years will also be “healthy.”
The stock could rise further, said Vinson Tsai, an analyst at Cathay Futures, a consulting firm in Taipei.
“TSMC’s stock price has not fully reflected the long-term rising tide of AI,” he said.
Following the media report on the US investigation, TSMC said on Friday that it is a law-abiding company and committed to complying with laws and regulations, including export controls.
“If we have any reason to believe there are potential issues, we will take immediate action to ensure compliance, including conducting investigations and proactively communicating with relevant parties, including customers and regulatory authorities as necessary,” it added.
The US Department of Commerce declined to comment, as did Taiwan’s Ministry of Economy, which is responsible for ensuring export controls are followed.
TSMC said in July 2020 that it had stopped taking new orders from Huawei and did not plan to ship chips after September of that year. ($1 = 32.1190 New Taiwan dollars)
(Reporting by Ben Blanchard; Additional reporting by Karen Freefield in Washington; Editing by Muralikumar Anantharaman and Savio D’Souza)
“Devoted student. Bacon advocate. Beer scholar. Troublemaker. Falls down a lot. Typical coffee enthusiast.”