What Is The Reason Behind TSMC's Rapid Rise To Become The World's 10th Largest Company By Market Capitalization?

News from the Financial Associated Press (Shanghai, editor Zhou Ling), stimulated by news that Intel's 7nm process will be outsourced for six months due to the delay of half a year, TSMC ADR after the US stock market soared 9.69% last Friday, Monday (27th Eastern Time) ADR again Soaring by more than 12%, it surpassed VISA and became the 10th largest listed company in the world by market value. On Tuesday, TSMC once had a daily limit in the Taiwan stock market, and its market value further expanded to over TWD 12 trillion (US$411 billion). In addition to the unfavorable news from rival Intel, in fact, TSMC has another good news. On the 27th, Taiwanese media reported that Intel had reached an agreement with TSMC to book a production capacity of 180,000 6-nanometer chips next year.


   Prior to this, Intel has announced the delay of 7nm process products on the market, and the entire R&D process may be postponed to 2022 or even 2023. And TSMC plans to mass produce the 3nm process in 2022.


   Taiwan’s recent consecutive rises are precisely investors’ further recognition of its technological leadership.


During the Asian trading hours on Monday, TSMC’s stock price opened higher, and finally closed at a daily limit price of NT$424.5, and its market value exceeded NT$11 trillion. This drove Taiwan's stock market to break through its all-time high to 12,686.36 in intraday trading on Monday, creating another 30-year history. new highs. On Tuesday, boosted by TSMC’s continued rally, Taiwan’s market continued to gap and open higher, with a surge of over 3% at one time. As of 10 o'clock, TSMC reported 454 Taiwan dollars, up 29.5 Taiwan dollars or 6.95%. It hit the daily limit of 466.5 Taiwan dollars before. Note: TSMC stocks trend chart in the past week. Source of data investing.com


   drives the Taiwan Index to a new high


   TSMC set five miracles on the Taiwan stock market on the 27th, including stock price, market value, and growth (since Taiwan stocks implemented a 10% rise and fall) all set historical records. TSMC accounted for 28.9% of Taiwan's equity. Every time the stock rose by 1 Taiwan dollar, its contribution to the broader market reached 8.57 points. With the active and passive funds to replace it, the stock price has been surprising recently.


   TSMC acted as the strongest engine to push up the index on the 27th. Under its leadership, the market broke through a historical high of 12,682 points. The total market value of listed companies reached 41.96 trillion Taiwan dollars. Taiwan stocks’ highs, closings and market capitalization simultaneously set new historical records. Affected by the global spread of the new crown epidemic, Taiwan stocks entered a bear market in mid-March, and they have rebounded 45% from their lows this year.


  Taiwan stocks continued to rise in early trading on Tuesday. The Taiwan Weighted Index (TWII) reported 12,825.81 points, up 237.51 points or 1.89%, and hit a record high of 13031.7 points, or more than 3% on the day.


   Cathay Pacific Securities Coordinator Jian Boyi said that Taiwan stocks funds are clearly concentrated in the semiconductor group, which has pushed up the volume and prices, setting a new record high. Funding trends are still moving closer to large-scale weight stocks. With the hot money effect, it is estimated that the short-term trend of "the strong will remain strong" will remain unchanged.


According to Huang Wenqing, deputy general manager of Taishin Investment Consulting, TSMC went public on September 5, 1994 at 96 Taiwan dollars per share. In the past 26 years, its share capital has risen from 7.8 billion Taiwan dollars to 259.304 billion Taiwan dollars, and its market value has soared from 74.88 billion Taiwan dollars to over 11. Trillions of Taiwan dollars, and earning money every year, with annual dividends (now changed to quarterly dividends). Not only does it hold the position of the semiconductor leader, but after investors are listed on TSMC, if they hold TSMC for a long time, the return rate is 190 times .


   Leading technology


   Intel is the world's most well-known IDM (Integrated Design and Manufacturing Model) company, and TSMC is the leading company focused on chip foundry. After Intel's R&D process was postponed, it even subcontracted some advanced process orders to TSMC, indicating that Intel has completely failed in the 7-nanometer advanced process.


   BMO Capital Markets analyst Ambrish Srivastava said that Intel's chip factory has long represented the high point of the advanced manufacturing industry in the United States, symbolizing the United States' dominant position in key technologies, but the current situation is no longer the case.


   He said that the gap between each generation of semiconductor processes is called a node, which is usually 24 to 30 months. The delay in the development of this process has made Intel one node behind TSMC, which means that the semiconductor dominance will be replaced in 4 to 5 years.


   Currently, there are only two foundries in the world, TSMC and Samsung. The defeat of Intel means that TSMC is expected to win a larger market share of high-end products, and the company's profitability is further opened up.


For example, AMD will increase the number of orders for TSMC’s 7/7+ nanometer process in order to quickly occupy the processor market when Intel’s 7nm chip progress is delayed. It is expected that the order for 7/7+ nanometer chips will increase to 20 next year. 10,000 pieces, approximately double this year, is expected to become TSMC’s largest customer of 7-nanometer chips next year.


  Thanks to Intel and AMD’s orders, TSMC’s manufacturing capacity will remain fully loaded in the first half of 2021.