TSMC stock hit new highs after posting forecast-beating earnings

TAIPEI (Reuters) – TSMC's Taipei-listed shares hit a record high on Friday after the chipmaker posted a third-quarter earnings forecast and a rosy outlook on strong artificial intelligence (AI) demand.

Shares jumped 6% to T$1,100 ($34.25) shortly after the open, surpassing the previous record of T$1,080 hit on July 11. This gave TSMC a market capitalization of about $884 billion, the highest of any listed company in Asia.

The company appeared to face some political uncertainty after US media outlet The Information said the US Department of Commerce was investigating whether TSMC was making AI or smartphone chips for China's Huawei, whose access to non-Chinese chips has been severely curtailed. US export controls.

As the world's largest contract chipmaker, TSMC, whose customers include Apple and Nvidia, has benefited from the rise toward AI across the industry spectrum.

TSMC, on Thursday, forecast a 54% jump in quarterly profit, raised its revenue forecast for the year and said the next five years would also be “healthy”.

Venson Tsai, an analyst at Cathay Futures Consultants in Taipei, said the stock could still go higher.

“TSMC's share price has not fully reflected AI's long-term rising tide,” he said.

Following media reports about the US investigation, TSMC said Friday that it is a law-abiding company and is committed to complying with laws and regulations, including export controls.

“If we have any reason to believe there is a potential problem, 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 said.

The US Commerce Department 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 wafers after September of that year. ($1 = 32.1190 Taiwan dollars)

(Reporting by Ben Blanchard; Additional reporting by Karen Freifeld in Washington; Editing by Muralikumar Anantharaman and Savio D'Souza)