TSMC’s Shares Blossom After A.I. Focused Analyst Call Draws Management Confidence

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In the wake of an A.I. focused earnings call that saw its management stress that no matter what stage the artificial intelligence industry is, by the end of the year, TSMC will benefit from strong demand, the firm’s shares have continued to post gains in the Taiwan and American stock markets. TSMC is entering a new era in its history with 2024, as the firm is now leading the global chip industry in producing advanced chips.

At the same time, Intel, whose leadership has slipped lately, is also gearing up to launch products this year that it claims can outperform semiconductors due from TSMC next year. TSMC’s earnings call for its fourth quarter of 2023 earnings saw CEO Dr. C.C. Wei reiterate that his company will maintain technology leadership in 2024. Dr. Wei’s comments came alongside his confidence in TSMC’s ability to capture any growth in global demand for A.I. chips.

TSMC’s Bullish A.I. Optimism Rewarded By Investors As 2024 Kicks Off

Despite being traded on the Taiwan exchange for decades, the true bump in TSMC’s shares came after the coronavirus pandemic that saw global demand for computing products undergo a significant uptick. TSMC’s shares crossed NT$650 in 2021 when lockdowns were in effect and remote working picked up popularity.

However, the stock plummeted in 2022 after high interest rates and inflation brought the chip sector back to earth. Similarly, 2023 failed to see the stock reverse all of its 2022 losses, but after TSMC’s latest earnings call, the shares are closing in on their reading before the Russian invasion of Ukraine.

At the heart of this recent bullish optimism surrounding TSMC’s shares are comments by management during the fourth quarter of 2023 earnings call. Since the day the call took place, TSMC’s shares (TPE:2330) have gained roughly 6.5% – to account for most of their year to date gains.

The earnings call saw hard hitting questions from analysts, which also included queries related to the comparison between Intel’s 18A chip process and TSMC’s N3P. Dr. Wei outlined that after he had shared last year that Intel’s 18A – which the latter has claimed is equivalent to TSMC’s N2 products due in 2025 – is comparable to the N3P, his team looked over the data again, and he stands by his analysis as of January 2024.

The executive added that when comparing semiconductor node performance, analysts should also be mindful that competitor specification claims might be exclusive to the competitor’s products, while TSMC has to keep its customer requirements in mind.

Management was also prodded about A.I., which, according to Dr. Wei, is currently growing at a compounded annual growth rate (CAGR) of 50% for TSMC. The Taiwanese fab has also generated controversy in the industry with its plans to use non high-NA extreme ultraviolet (EUV) chip making machines for longer.

During the earnings call, TSMC’s top boss dismissed concerns that sticking to the older machines might be unwise. He stressed that TSMC has successfully navigated technology upgrades in the past, and the firm’s customers are happy with its current strategy.

While the firm’s shares have jumped by 7.75% on the Taiwan exchange over the past five days, its American Depository Receipts (ADRs) that trade on the New York Stock Exchange (NYSE) are up by nearly 13% over the same time period. Since the call, TSMC’s ADRs have gained 9.4%.

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