TSMC Shares Surge to Unprecedented Valuation Amid AI Demand and Trade Tensions

The global leader in semiconductor foundry services, Taiwan Semiconductor Manufacturing Company (TSMC), saw its equity reach a historic peak in November, closing at a record $313.98. This surge is fueled by relentless demand for artificial intelligence processors from key clients, including Nvidia, Alphabet, and Amazon. However, this financial success unfolds against a backdrop of escalating trade secrecy disputes in its home market.

The company’s latest operational update revealed November revenue of NT$343.61 billion, equivalent to approximately $11.06 billion. This figure represents a substantial 24.5% year-over-year increase. While sales dipped by 6.5% compared to October, such month-to-month volatility is characteristic of the chipmaking sector.

Cumulative revenue for the period from January through November totaled NT$3.47 trillion, marking a 33% rise. Management’s guidance for the fourth quarter projects revenue between $32.2 billion and $33.4 billion, with a gross margin forecast of 59% to 61%. This outlook implies an annual growth rate of roughly 30% for the quarter.

Expansion Driven by Artificial Intelligence Boom

The company’s exceptional growth trajectory is directly linked to its dominant position in manufacturing cutting-edge AI chips. There is particularly intense demand for its advanced CoWoS packaging technology, essential for AI accelerators. To keep pace with orders, TSMC is aggressively expanding its production capabilities, including preparations for its upcoming 2-nanometer process node. This global expansion has been supported by state incentives totaling nearly NT$147 billion over the past two years.

Should investors sell immediately? Or is it worth buying TSMC?

Trade Secrets Law Enforcement Intensifies in Taiwan

Concurrent with its strong financial performance, a technology protection conflict is gaining momentum. Taiwanese authorities have, for the first time, invoked a national security law enacted in 2022 to safeguard chip technology. Prosecutors conducted a search at the residence of former TSMC vice president Wei-Jen Lo, who left the company after 21 years in October to join Intel.

In a separate case, charges were filed by prosecutors against the local subsidiary of Tokyo Electron. A former employee is accused of stealing details pertaining to TSMC’s most sophisticated chip designs. Intel has dismissed all allegations, citing the normal mobility of executive talent within the semiconductor industry.

Analyst Sentiment Remains Bullish

Commanding a market capitalization of approximately $1.6 trillion and boasting a 54% annual gain, TSMC ranks among the world's most valuable technology firms. The majority of market analysts reaffirm their buy ratings, with a consensus average price target of $355. The company is scheduled to release its complete fourth-quarter results and provide initial guidance for 2026 on January 15, 2026.