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

Taiwan Semiconductor Manufacturing Co TSM is set to increase its capital expenditures significantly in 2025, driven by strong demand and ongoing advancements in its 2nm process technology.

According to industry reports, TSMC’s capital expenditure is expected to reach between $32 billion and $36 billion, an increase of 12.5% to 14.3% from the previous year and the second highest in the company’s history.

ASML Holding ASML and Applied Materials Inc AMAT are anticipated to benefit from TSMC’s increased capital expenditures, with related third-party manufacturers also seeing potential gains, UDN reports. TSMC is a key supplier to Nvidia Corp NVDA too.

TSMC plans to spend between $28 billion and $32 billion in 2024. Mass production of its 2nm process is expected to begin in 2025, following a similar production curve to the 3nm process. TSMC Chairman Wei Zhejia confirmed that TSMC met its three-year $100 billion investment plan last year.

TSMC’s 2nm production capacity is expected to span Taiwan, including new phases in Zhuke Baoshan Ke and Kaohsiung.

TSMC stock gained over 67% in the last 12 months. Investors can gain exposure to the semiconductor sector via VanEck Semiconductor ETF SMH and SPDR Select Sector Fund – Technology XLK.

Price Action: TSM shares traded higher by 0.48% at $171.50 premarket 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.

Image via SK Hynix