Taiwan Semiconductor Manufacturing Company Ltd (NYSE:TSM) is the prime beneficiary of the global AI-driven semiconductor boom, as Taiwan’s stock market overtakes India’s in total market value.
TSMC Drives Taiwan’s Market Rally
Taiwan’s stock market capitalization climbed to $4.95 trillion, surpassing India’s $4.92 trillion and making Taiwan the world’s fifth-largest equity market.
Taiwan Semiconductor played a central role in the rally, accounting for roughly 42% of Taiwan’s benchmark index, Business Standard reported on Tuesday.
The chipmaker’s shares have surged 49% this year as investors poured money into AI-linked semiconductor companies.
Franklin Templeton fund manager Yi Ping Liao said Taiwan’s rising market value reflects its heavy concentration in tech hardware companies tied directly to the AI investment cycle.
Liao added that markets with limited exposure to AI hardware are increasingly falling behind Taiwan and South Korea.
AI Boom Strengthens TSMC’s Dominance
Analysts said Taiwan Semiconductor continues benefiting from strong global demand for AI semiconductors, which remain critical to the broader AI infrastructure buildout.
Taiwan’s financial regulator also introduced new rules favorable to Taiwan Semiconductor by raising the single-stock investment cap for domestic funds from 10% to 25% in cases where a company exceeds 10% index weighting.
Taiwan Semiconductor is currently the only company meeting that threshold.
JPMorgan analysts said the rule change could attract more than $6 billion in new inflows into Taiwan’s market.
Previously, UOB Kay Hian analyst Qi Wang told CNBC that Taiwan’s decision to raise the single-stock investment cap could drive $30 billion to $40 billion of domestic inflows into Taiwan Semiconductor.
Wang said the policy could strengthen Taiwan’s dependence on Taiwan Semiconductor and increase long-term concentration risks.
However, he added that the company remains “very well-positioned as a monopoly in advanced AI semiconductors” as AI capital spending continues to grow rapidly.
TSMC Delivers Record Earnings
On April 16, Taiwan Semiconductor reported first-quarter revenue of 1.134 trillion New Taiwan dollars, up 40.6% year-over-year (in dollar terms), while net profit jumped 58% to 572.5 billion New Taiwan dollars.
Both revenue and profit reached record highs and exceeded analyst expectations.
Despite the strong financial performance, reports emerged that Taiwan Semiconductor employees had grown frustrated over rumors of potential layoffs and bonus reductions.
Employees React To Bonus And Layoff Speculation
Reports circulating on employee social media channels claimed Taiwan Semiconductor could reduce headcount by around 5% and cut bonuses by as much as 15%.
Some employees reportedly discussed possible collective action online after the rumors spread, although Taiwan Semiconductor management had not yet responded officially, Upi.com reported on Monday.
Taiwanese media suggested the concerns may stem from rising costs tied to Taiwan Semiconductor’s global factory expansion, growing research and development spending, and shareholder pressure for continued returns.
Analysts And Observers Downplay Strike Risks
Analysts said a coordinated strike at Taiwan Semiconductor remains unlikely because the company lacks a formal labor union structure.
Beijing-based Taiwanese businessman Feng Mengrong said Taiwan Semiconductor employees already receive exceptionally high compensation compared with average Taiwanese workers, making broader public sympathy for bonus-related protests unlikely.
Taiwanese media outlets also criticized discussions around strike action, arguing that many workers would view complaints from highly paid Taiwan Semiconductor employees as excessive.
TSM Price Action: Taiwan Semiconductor shares were up 1.34% at $409.94 during premarket trading on Tuesday. The stock is approaching its 52-week high of $421.97, according to Benzinga Pro data.
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