TSMC's January revenue grew by 37%, reaching a new high of 1905 before the closing date

TSMC (2330) demonstrates strong momentum ahead of the Year of the Snake closing, with the stock price breaking through historical barriers and currently reaching a new high of NT$1,905. This rally is supported not only by impressive fundamentals, with January revenue up 37% year-over-year, but also by optimistic market expectations regarding the new U.S. administration’s chip policies. Foreign media reports reveal that the Trump administration is considering offering tariff exemptions in exchange for TSMC expanding its investments in the U.S., which would strengthen the flow of orders from American giants like Amazon and Google. Despite lingering concerns about an AI bubble, from capital expenditure to policy incentives, TSMC demonstrates its unshakable strategic position in the AI era.

Year of the Snake closing approaching, strong fundamentals support TSMC’s stock reaching new highs

TSMC’s stock performed strongly on the closing day, currently at NT$1,905, setting a new record. The core driver of this rally is the unexpectedly strong performance, with the company announcing January consolidated revenue of NT$401.3 billion (approximately US$12.7 billion). While the month-over-month growth was slightly affected by seasonal factors, the year-over-year increase reached 37%, far exceeding market expectations. This indicates that even amid traditional off-peak seasons and fewer working days, orders for advanced processes like 3nm and 5nm from Nvidia and Apple remain in high demand. Investors’ confidence in TSMC’s fundamentals is reflected in the pre-closing buying spree, confirming the long-term bullish trend for AI hardware demand.

TSMC trades investment for tariff exemptions, tying in with U.S. tech giants?

Another key driver behind the stock’s rise is the easing of geopolitical risks. According to the Financial Times, the Trump administration is developing a new policy to exempt tech giants like Amazon, Google, and Microsoft from tariffs on chip purchases, provided TSMC commits to expanding its investments in the U.S. This “exchange” links TSMC’s capacity expansion with tax benefits for U.S. customers, creating a tripartite symbiotic structure among clients, the government, and foundries. The market interprets this move as significantly reducing future supply chain disruptions from tariff battles and ensuring capacity utilization at TSMC’s U.S. plants, alleviating some investor concerns about geopolitical uncertainties.

Capital expenditure expansion and the AI bubble debate

Looking ahead, TSMC plans to increase this year’s capital expenditure to US$56 billion, a substantial 25% increase from last year, to meet the massive demands of data centers and AI accelerators. Nvidia CEO Jensen Huang describes this as a “generation-scale infrastructure rebuild.” However, while the market celebrates, some analysts remain cautious, worried that the high capital spending by tech giants may not translate into short-term software profits, potentially triggering corrections similar to those during the internet bubble era. Although TSMC’s stock has reached NT$1,905, ongoing concerns include the monetization of end-user AI applications and whether the global economy can sustain such a massive hardware arms race.

This article, “TSMC’s January Revenue Grows 37%, Reaches NT$1,905 High Before Year-End Closure,” first appeared on Chain News ABMedia.