TSMC stocks are on a bullish run, hitting historical highs for the second day in a row. The shares surged about 5% following news of potential easing of regulations for funds in Taiwan and strong earnings reports. The market received two signals at once — more capital could flow into the stocks, and the company's business is showing steady growth.
The situation appears systemic. It's not just a one-time spike, but a blend of fundamental factors and regulatory changes.
Taiwan is ready to open access to TSMC shares.
The main external factor is the proposal to change the rules for local funds. The regulator is considering raising the investment limit in one company from 10% to 25% of the portfolio.
For TSMC, this is critical. The company holds a significant share in the Taiwan stock index, and any changes to limits automatically ramp up the potential buying volume.
Funds may increase positions in TSMC.
If the rule is adopted, funds will have the opportunity to increase their TSMC stake by nearly 2.5 times. This creates expectations of additional demand from institutional investors.
The market quickly priced in this scenario. Even the mere discussion of changes is already impacting participant behavior.
The company’s profits are growing faster than expected.
The second factor is strong earnings. TSMC's net profit in the first quarter grew by 58% and reached 572.48 billion Taiwanese dollars.
This marks the fourth consecutive quarter with record values. For investors, it’s confirmation that the company maintains its growth momentum even amidst global uncertainty.
Demand for chips remains high.
TSMC continues to benefit from demand for high-performance chips. Key clients—Apple and Nvidia—are generating a steady flow of orders.
The role of the artificial intelligence segment is especially notable. Chip production for AI remains one of the fastest-growing areas in the industry.
The company is expanding its technology lineup.
Beyond financial results, TSMC is actively advancing technologies. The company unveiled new plans for 2nm processes and below, as well as updates for future generations of chips.
Development is progressing across multiple fronts. This includes increasing transistor density, reducing energy consumption, and working with new architectures.
Partnerships strengthen market positions.
TSMC is expanding its collaboration with Siemens in chip design. The focus is on automation and leveraging artificial intelligence in development.
This allows for faster product development. For clients, it means a quicker transition to the next generation of technologies.
New tech processes are shaping long-term growth.
The company also presented plans for the next generations of technologies, including A13 and improved versions of 2nm processes. Production of these solutions is scheduled for the end of the decade. This sends an important signal to the market. TSMC is already laying the groundwork for future growth.
The market views TSMC as a key player in AI.
The stock growth reflects a broader trend. TSMC is seen as the backbone of infrastructure for artificial intelligence. Without its capabilities, scaling computations is impossible. This positions the company as one of the key beneficiaries of the technology cycle.
What’s next?
The future dynamics of the stock will depend on two factors. The first is the final decision on the rules for funds in Taiwan. The second is the sustained high demand for chips from major clients. So far, both factors favor growth. This explains why the stocks keep hitting new highs.
