What just happened? TSMC, the world's largest contract chipmaker, briefly became the eighth publicly listed company to reach a trillion-dollar market cap after its ADR share price rose 4.8 percent on the NYSE. The stock has since settled below its all-time high, with the company's current market value hovering around $816 billion, based on the latest prices on the Taiwan Stock Exchange.
TSMC's market cap increased by more than 50 percent over the past 12 months, largely due to a surge in demand for Nvidia's AI chips. Nvidia, which briefly became the world's most valuable company last month with a market cap of $3.3 trillion, is a key customer for TSMC. The company also manufactures chips for top tech firms such as Apple, AMD, Intel, Qualcomm, Broadcom, and others.
The latest boost to TSMC's stock price can be attributed to a recent report by J.P. Morgan Securities analysts who expressed confidence in the company's 2024 revenue growth, fueled partly by an uptick in demand from Apple. The asset management firm has an "Overweight" rating on TSMC stock with a price target of 1180 Taiwan dollars (around $36).
On the business front, TSMC is preparing to debut its 2nm process node, which will be used to manufacture Apple's A19 chipsets for the iPhone 17 and the M5 family for next-generation Macs.
According to ET News, the company will start producing 2nm chips at its Baoshan plant in northern Taiwan next week for testing purposes. The equipment and hardware to start the testing phase were reportedly brought to the facility in the second quarter of this year.
The 2nm process will be an improvement over the 3nm architecture used to manufacture the A17 Pro SoC for the iPhone 15 Pro and the M4 chip for the latest MacBook Pro. The 2nm chips are expected to pack more transistors into a smaller space, enabling faster performance and improved power efficiency. The M5 could offer 10 to 15 percent faster performance than the M4 with 30 percent lower power consumption.
The iPhone 17 family is expected to be the first to receive TSMC's 2nm chips before they make their way to the 14-inch and 16-inch MacBook Pros. The chipmaker is said to be on track to start mass producing 2nm chips next year and is currently working to secure stable yields.