What's Going On With Taiwan Semi Stock On Tuesday?

On Tuesday, Taiwan Semiconductor Manufacturing Co's TSM C.C. Wei assumed the Chairman and CEO roles, marking the first time in years someone has held both positions. The stock is trading lower on Tuesday after closing higher by almost 3% on Monday.

Wei reiterated expectations for AI advancement to fuel a recovery in the industry by 2024. Quite interestingly, Wei is looking to boost the price of his company's AI chip production services.

He has already discussed the matter with Nvidia Corp NVDA chief Jensen Huang, the Nikkei Asia reports.

He maintained earlier forecasts of 10% chip market growth this year, excluding the memory sector, though it was a more conservative outlook compared to April, citing challenges in smartphone and personal computing markets, Bloomberg reports.

Also Read: Taiwan Semi Leverages Asian Expertise and Culture for Chip Manufacturing Edge

Wei also ruled out the possibility of migrating TSMC's chip factories out of Taiwan, given that 80-90% of its production capacity is in the island.

The move reflects growing geopolitical tensions between Washington and China and The island's tensions with China, Reuters reports.

Wei's appointment represents a shift in leadership at TSMC, founded by Morris Chang and a pivotal player in global AI expansion.

TSMC remains crucial to tech giants like Apple Inc AAPL, Nvidia, and SK Hynix, supporting their AI services.

Consolidating power under one executive comes as TSMC expands production overseas, notably with its Arizona plant, which is its most significant foreign investment. Wei emphasized TSMC's commitment to prioritizing advanced technology adoption in Taiwan before expanding abroad.

TSMC executives indicated a focus on future investments over share buybacks or splits to capitalize on industry expansion.

TSMC emerged as the leading foundry by revenue in the first quarter with a 62% market share. It expects up to 30% second-quarter sales growth. CNBC's Jim Cramer, expects Nvidia to soon cross Microsoft Corp's MSFT market cap backed by the former's AI, cloud computing, and data center moat.

Currently, the semiconductor industry, led by Nvidia, is struggling to adequately supply its customers with advanced AI graphical processing units (GPUs) triggered by the AI frenzy.

Additionally, growing geopolitical tensions between the U.S. and China are further affecting chip companies, which the U.S. has forbidden from supplying their advanced chip technology to China and the Middle East.

TSMC stock gained over 58% in the last 12 months. Investors can gain exposure to the semiconductor sector via VanEck Semiconductor ETF SMH and iShares Semiconductor ETF SOXX.

Price Actions: TSM shares traded lower by 1.83% to $152.12 at the last check Tuesday.

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

Photo by Jack Hong via Shutterstock