According to the financial news app, Zhì tōng cáijīng, on Thursday, Taiwan Semiconductor's (TSM.US) stock listed on the Taiwan Exchange hit a historic high of NT$1080 due to better-than-expected Q2 sales, driving the company's market cap to NT$28 trillion (approximately USD $861 billion) and becoming the highest market-cap company in Asia. Data shows that so far this year, the stock has risen by nearly 80%, far exceeding the 35% increase of the benchmark stock index, the Taiwan Weighted Index. In the meantime, Taiwan Semiconductor's American Depositary Receipt (ADR) touched a historic high of $192.8 on Monday with a market cap surpassing $1 trillion; the stock closed at $191.05 on Wednesday.

Boosted by the AI boom, Taiwan Semiconductor's Q2 sales surpassed market expectations. Data released by Taiwan Semiconductor on Wednesday showed that the company's net revenue for June was NT$207.9 billion, which means that Q2 net revenue reached NT$673.5 billion, a year-on-year increase of 40%, higher than market expectations of 35.5% on average. Taiwan Semiconductor's strong performance boosted chip stocks worldwide, and the PHLX Semiconductor Index rose 2.4% on Wednesday, hitting an all-time high.

Taiwan Semiconductor's strong upward momentum stems from the belief that the demand for advanced process chips will be boosted by the AI boom, increasing Taiwan Semiconductor's bargaining power. Prominent Wall Street investment banks such as Citigroup, Goldman Sachs, and Macquarie have therefore raised their target stock prices for Taiwan Semiconductor.

According to a recent report by Macquarie Securities, most of Taiwan Semiconductor's clients have agreed to raise contract manufacturing prices in exchange for reliable supply, which will drive Taiwan Semiconductor's gross margin further. According to analysts' estimates, Taiwan Semiconductor's gross margin will rise to 55.1% by 2025; by 2026, it will approach 60%, reaching 59.3%.

Industry insiders analyze that this price increase may be based on a comprehensive consideration of market demand, TSMC's capacity constraints, and costs. It is reported that major TSMC customers such as Apple, Qualcomm, Nvidia, and AMD have already massively booked TSMC's 3nm process family capacity, and customer queues for 3nm OEM contracts are expected to continue until 2026.

Taiwan Semiconductor is still the core chip manufacturer for Fabless chip design companies such as Apple, Nvidia, AMD, and Broadcom, especially the data center server-side AI chips manufactured for Nvidia and AMD, which are considered the critical hardware infrastructure behind massive AI training/inference systems driving tools like ChatGPT.

Daniel Tan, portfolio manager at Singapore's Grasshopper Asset Management, said: "Optimism around AI-related demand and the potential pricing power continued to grow, and Taiwan Semiconductor's leading position in chip manufacturing is expected to increase the company's profitability in 2025." "In an industry where supply is becoming increasingly tight, as customers bid for sufficient capacity allocation, Taiwan Semiconductor's market value is expected to be further amplified in 2025."