Key insights
- TSMC shares hit a record high after Taiwan eased single-stock investment caps, allowing funds to increase their allocation to TSMC. This reflects strong demand for TSMC's chips, particularly driven by AI and major clients like Apple and Nvidia. While primarily a Taiwan-specific event, TSMC's global importance in semiconductor manufacturing suggests a positive, albeit moderate, read-through for US tech and AI-related equities.
Shares in Taiwan Semiconductor Manufacturing Co. surged 5% to a fresh all-time high on Friday after the island's regulator said it plans to loosen limits on funds' allocations to single stocks.
Under the revised framework, domestic equity funds and actively managed ETFs focused exclusively on Taiwanese stocks will be allowed to allocate up to 25% of their assets to any listed firm that carries a weighting above 10% on the Taiwan Stock Exchange.
A long-standing rule had capped fund managers' allocations to a single company at 10% of their portfolio's net asset value.TSMC, whose shares had a hit a record high on Thursday as well, last week reported a 58% increase in first-quarter profit, beating estimates as the boom in artificial intelligence drives demands for chips.
TSMC's net income of 572.48 billion new Taiwanese dollars for the three months ended in March represented a fourth consecutive quarter of record profits.
The company is Asia's most valuable technology firm, and produces semiconductors that are used across devices from consumer gadgets to large-scale data centers.
The world's largest contract chipmaker continues to see robust demand for cutting-edge chips from major clients such as Apple an, while also benefiting from the rapid expansion of AI, manufacturing advanced processors designed by companies like Nvidia — now its largest customer.