Following the announcement of Intel's retreat from manufacturing its own semiconductors, shares of Taiwan Semiconductor Manufacturing Co (TSMC) climbed by as much as 10 percent to a new record high this week.
TSMC's shares hit a record high of NT$424.50 per share in Taiwan on Monday. Its shares then climbed further on Tuesday, reaching a high of NT$464 per share in early morning trading. The increase in its stock prices added more than $30 billion to TSMC's market capitalization. The latest rally also managed to place the Taiwan Capitalization Weighted Stock Index (Taiex) in a strong position to reach a high not reached in over three decades.
At its current prices, TSMC is now the 12th most valuable stock worldwide, ahead of some of its closest rivals. Prior to Monday's rally, TSMC's stock price had already increased by more than 17 percent since the start of the year. The gradual increase of its stock price over the past few months came after a global rush to buy tech shares; a rush that has sent the United States' NASDAQ Composite Index to a new record high earlier in the month.
For July, total foreign investment in Taiwan's tech-heavy stock market reached more than $854 million. This marked the largest inflow of foreign capital to an Asian market, most of which has gone to TSMC, which makes up a third of Taiwan's market-cap-weighted Taiex Index.
The surge came after Intel announced late last week that it may be temporarily halting the production of its own chip designs. The chipmaker explained that the continued disruptions caused by the coronavirus pandemic had greatly hampered its ability to catch up with the development of new semiconductor process technologies. The rally in TSMC's stock was also mirrored by a similar surge in the stock prices of its rival Advanced Micro Devices.
Like other tech companies and online retailers, TSMC had been able to weather the bulk of the economic impact caused by the coronavirus pandemic. The company only reported a relatively insignificant slowdown in its business throughout the first few quarters of the year.
The continued demand in high-end 5G wireless technologies, data centers, and other high-performance computing products during the pandemic meant that TSMC's business had flourished throughout the crisis. The company even raised its full-year outlook, stating that it now expects its capital expenditure to increase to as much as $17 billion as it continues to make long-term investments in the development of new technologies.
