Why Taiwanese semiconductor stocks soared nearly 5% higher today

A few encouraging news stories boosted the chip manufacturing powerhouse Taiwanese semiconductor manufacturing‘S (NYSE: TSM) Stock prices are significantly higher on Wednesday. The company’s shares rose in price by almost 5%, easily surpassing the 0.8% increase in the stock price. S&P500 Table of contents.

Taiwan Semi posted encouraging sales for January

The first item was Taiwan Semi’s latest monthly revenue report.

The company reported that it earned just under 216 billion new Taiwan dollars ($6.9 billion) in January, a significant increase on both a sequential and year-over-year basis. The figure was 22% higher than the December 2023 figure and represented an improvement of almost 8% year-on-year.

That alone was an encouraging development. Demand potato chips remains high, especially now that the technology sector is in an arms race to develop compelling artificial intelligence features and apps. This plays very well into the hands of chip makers like Taiwan Semi.

The second news, announced slightly ahead of the revenue update, is that a trio of top Japanese companies are collaborating on an investment in one of the company’s business units in that country.

Sony Semiconductor solutions, Toyotaand former Toyota auto parts company Denso investing in a second semiconductor factory for Japan Advanced Semiconductor Manufacturing (JASM). The latter company is majority owned by Taiwan Semi. Total investments in JASM’s two factories, located in Kumamoto Prefecture, should exceed US$20 billion.

The right kind of company, in the right place

According to Taiwan Semi’s press release on the Kumamoto real estate investments, they will receive “strong support from the Japanese government.” Even though it wasn’t…

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