Taiwan’s stock market rose by more than 300 points to close at a fresh high on Monday (Jul 8) on the back of strong performances by chipmaker Taiwan Semiconductor Manufacturing Co (TSMC) and iPhone-assembler Hon Hai Precision Industry.
Market sentiment improved as investors witnessed major indexes for the US markets hit record highs at the end of last week, driven by expectations of a potential rate cut by the US Federal Reserve in September following the latest jobs data for June.
The Taiex, the Taiwan Stock Exchange’s (TWSE) weighted index, ended up 321.56 points, or 1.37 per cent, at 23,878.15, after moving between 23,505,86 and 24,011.64 during the trading session. TSMC rose 2.99 per cent to close at NT$1,035.00 and its gains contributed around 245 points to the Taiex’s rise, boosting the electronics index and the semiconductor sub-index by 2.07 per cent and 2.68 per cent, respectively.
TSMC’s shares extended its rally this year to more than 75 per cent. Morgan Stanley raised its target on the stock by about 9 per cent, expecting the chipmaker to raise its full-year sales estimate in the earnings announcement next week. The broker also sees TSMC hiking wafer prices due to its strong bargaining power.
“TSMC’s ‘hunger marketing’ strategy seems to be working,” Morgan Stanley analysts including Charlie Chan wrote in a note on Sunday (Jul 7). “Our latest supply chain checks indicate that TSMC is delivering a message that leading-edge foundry supply could be tight in 2025 and customers may not get sufficient capacity allocation without appreciating TSMC’s value.”
JPMorgan analysts including Gokul Hariharan also anticipate the company will raise its revenue guidance in the earnings call.
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“We expect TSMC to sound more constructive on AI accelerator demand,” he wrote in a note on Sunday.
Morgan Stanley and JPMorgan joined brokers including Nomura Holdings and Mizuho Securities in expressing optimism over TSMC leading into its second-quarter results. The maker of the world’s most advanced chips – used by the likes of Apple and Nvidia – is expected to report 36 per cent revenue growth from a year earlier, the fastest pace since the last quarter of 2022, according to data compiled by Bloomberg.
The earnings optimism pushed the company’s Taipei shares past NT$1,000 last week. Its market value based on the American depositary receipts recently briefly surpassed Berkshire Hathaway to become the eighth-largest company globally, and it now has a market cap of over US$950 billion. BLOOMBERG
