Why Taiwan Semiconductor Stock Raced Nearly 5% Higher Today


Two encouraging news spurred chipmaking powerhouse Semiconductor manufacturing in TaiwanIt is (NYSE:TSM) the stock is significantly higher on Wednesday. The company's stock price rose nearly 5%, far outpacing the barometer's 0.8% rise. S&P500 hint.

Taiwan Semi recorded encouraging sales for January

The first item was Taiwan Semi's latest monthly earnings report.

The company reported earning just under 216 billion New Taiwan Dollars ($6.9 billion) in January, representing a significant increase on both a sequential and year-over-year basis. This figure was 22% higher than December 2023 and represented a year-over-year improvement of almost 8%.

This alone was an encouraging development. Request fleas remains high, especially now that there is an arms race in the technology sector to develop compelling artificial intelligence features and applications. This suits chipmakers like Taiwan Semi very well.

The second piece of news, leaked a little before the earnings update, is that a trio of major Japanese companies are collaborating to invest in one of the company's business units in that country.

Sony Semiconductor solutions, Toyotaand former auto parts company owned by Toyota Denso are investing in a second semiconductor factory for Japan Advanced Semiconductor Manufacturing (JASM). The latter company is majority owned by Taiwan Semi. Overall investments in JASM's two factories, located in Kumamoto Prefecture, are expected to exceed $20 billion.

The right type of business, in the right location

According to Taiwan Semi's statement on investments in the Kumamoto property, they will benefit from “strong support from the Japanese government.” While it wasn't entirely clear what that meant, it's a sign that major Asian companies and top officials are able and willing to support the continent's chipmaking king.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool posts and recommends Taiwan Semiconductor Manufacturing. The Mad Motley has a disclosure policy.

Why Taiwan Semiconductor Stocks Are Up Nearly 5% Today was originally published by The Motley Fool



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