What's Going On With Taiwan Semi Stock Thursday?

Taiwan Semiconductor Manufacturing Co TSM is reportedly exploring a new method of advanced chip packaging to meet the growing AI-driven demand for computing power.

The key Nvidia Corp NVDA and Apple Inc AAPL supplier is collaborating with equipment and material suppliers on this new technique, which could take several years to commercialize.

The innovation involves using rectangular panel-like substrates instead of the traditional round wafers, enabling more chip sets per substrate, the Nikkei Asia reports. TSMC stock is trading higher Thursday.

The rectangular substrates under trial minimize unused space, presenting a significant technical shift for TSMC. The transition will require extensive development efforts and equipment upgrades.

TSMC’s advanced chip stacking and assembly techniques, used to produce AI chips for Nvidia, Advanced Micro Devices, Inc AMD, and the U.S. Big Tech giants, currently use 12-inch silicon wafers. The chipmaker is expanding its advanced chip packaging capacity in Taiwan, with the Taichung expansion primarily for Nvidia, the Tainan expansion for Amazon, and its chip design partner Alchip.

TSMC is nearing the $1 trillion market capitalization milestone, driven by a stock rally and surging AI-related demand.

Several Wall Street brokerages have raised their price targets for TSMC this week, citing potential earnings boosts from AI demand and anticipated price hikes in 2025, Bloomberg reports.

Goldman Sachs predicted a rise in three- and five-nanometer chip manufacturing prices. JPMorgan expects TSMC to raise its 2024 revenue guidance and capital expenditure potentially.

Last week, TSMC surpassed Berkshire Hathaway Inc BRK BRK to become the eighth-largest company globally in terms of market capitalization.

Recent reports indicated Apple, Qualcomm Inc QCOM, Nvidia, and AMD have nearly booked TSMC’s 3nm process to total capacity through 2026. TSMC also wants to convert some 5nm equipment to enhance 3nm production capacity.

Taiwan Semiconductor stock gained 73% in the last 12 months. Investors can gain exposure to the semiconductor sector via Vanguard FTSE Emerging Markets ETF VWO and Vanguard FTSE All World Ex US ETF VEU.

Price Action: TSM shares traded higher by 2.74% to $184.61 premarket at the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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