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

Taiwan Semiconductor Manufacturing Co TSM has received approval from the Kaohsiung city government to construct its third 2nm fab.

This new facility will occupy 17.22 hectares in the Nanzih District industrial park, expanding TSMC’s regional footprint.

The land for this new project is situated east of TSMC’s initial plant at the 238-hectare Nanzih Technology Industrial Park, Fudzilla reports.

Also Read: Nvidia Accelerates AI Chip Production with New Packaging Tech to Meet Soaring Demand

TSMC aims to meet the growing demand for AI chips, particularly Nvidia Corp’s NVDA Blackwell-series, which have experienced high demand outstripping supply. Additionally, other chipmakers are keen to produce their own AI chips, pushing TSMC to ramp up its production capabilities.

TSMC will develop the third fab on polluted land that it plans to clean and prepare for production.

Prior reports indicated that TSMC was exploring advanced chip packaging methods to address the growing demand for AI-driven computing power. The contract chipmaker’s key customers, Apple Inc AAPL, Qualcomm Inc QCOM, Nvidia, and Advanced Micro Devices, Inc AMD, have nearly booked TSMC’s 3nm process to total capacity through 2026.

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

Is TSM A Good Stock To Buy?

Wall Street analysts view Taiwan Semiconductor TSM on the whole as a Outperform, given the history of coverage over the past three months. Mark Li from Bernstein in Taiwan Semiconductor is the most optimistic, expecting a 33.33% rise in the stock in the coming year.

But looking at how the market as a whole thinks of the stock, you can reference historical price action for views on whether investors feel strongly about the stock one way or another. In the past 3 months, Taiwan Semiconductor rose 26.91%, which indicates that opinion improved on the business and how attractive it is to own based on either its stock price, or underlying fundamentals, like revenue, which rose 12.88% over the past year.

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Price Action: TSM shares traded higher by 1.35% at $174.39 at the last check on Thursday.

Photo by Jack Hong via Shutterstock