TSMC (2330) led the stock market higher today (July 3rd), with its stock price climbing to 979 yuan, surpassing the 10-day moving average and nearing the 1,000 yuan mark. Industry analysts believe TSMC’s upcoming legal press conference on July 18th will generate positive market sentiment. Riding the wave of the global AI boom, TSMC, with its technological leadership, is expected to secure massive orders for advanced processes from various stakeholders. Foreign investors have also frequently expressed bullish sentiment regarding TSMC, raising target prices and initiating discussions, which will contribute to the growth of the domestic market. High-volume exchange-traded funds (ETFs) are poised to capitalize on this upward momentum.
TSMC’s legal meeting will start the market ahead of schedule, and semiconductor ETFs are expected to rise once more. Schematic/Getty Images (BING-JHEN HONG via Getty Images)
According to CMoney statistics, domestic high-volume ETFs have performed exceptionally well this year. Taking semiconductor ETFs as an example, the top-performing Shin Kong Taiwan Semiconductor 30 (00904) has seen a 29.67% increase since the beginning of the year, claiming the top spot among all semiconductor ETFs. It even surpassed the weighted stock price index’s 29.23% growth during the same period. Other notable performers include Mega Taiwan Wafer Manufacturing (00913), Fubon Taiwan Semiconductor (00892), Qunyi Semiconductor Earnings (00927), and CITIC Key Semiconductor (00891), all boasting interest-inclusive returns exceeding 25%.
Zhan Jiafeng, manager of 00904, stated that prior to TSMC’s upcoming legal meeting on July 18th, industry reports suggested stronger-than-expected demand for TSMC’s 2nm technology. Anticipations point towards TSMC’s capital expenditures in 2025 surpassing those of 2024. Estimates suggest that TSMC’s capital expenditure this year will fall between $28 billion and $32 billion, with a possibility of reaching $32 billion to $36 billion next year. This will not only boost the future performance of TSMC’s related equipment supply chain but also fuel stock prices within Taiwan’s semiconductor supply chain, attracting investors back to semiconductor stocks.
Shin Kong Investment Trust’s Taiwan stock investment team highlighted the focus on TSMC’s 2025 capital expenditure growth as a key driver for Taiwan stock investment in July. The continuous development of semiconductor advanced processes and equipment is expected to attract substantial capital. Many semiconductor stocks have already started showing positive momentum.
Furthermore, the third quarter performance of many new technology products is anticipated to be strong, fueled by the launch of iPhone sales, the release of Huawei’s first tri-fold screen mobile phone, and the announcement of results from AI and semiconductor-related supply chains. This positive development will likely contribute to increased performance and stock prices for electronics companies.
Zhan Jiafeng predicts that listed over-the-counter (OTC) companies will start announcing their June revenue this week. The June revenue performance of these companies is expected to be positive. Also, the Taiwan dollar experienced a depreciation of approximately 1.5% once morest the US dollar in the second quarter. These exchange earnings for listed OTC companies, coupled with the anticipated positive financial reports in the second quarter, are expected to drive strong performance in the third quarter.
Additionally, Nvidia will be releasing its financial report on August 23rd. If the report delivers positive results, it is anticipated to boost semiconductor stock prices. Currently, Taiwan stock moving averages indicate a long position, suggesting a correction of deviation and overheating. Following this adjustment, the mid-to-long-term outlook remains optimistic. Investors are advised to prioritize semiconductor-related targets following the index pulls back.
TSMC’s Rising Stock Price and the Semiconductor ETF Boom
TSMC (2330), the world’s leading semiconductor foundry, saw its stock price climb to 979 yuan on July 3rd, exceeding the 10-day moving average and nearing the 1,000 yuan mark. This surge is anticipated to continue, fueled by the upcoming 18th French press conference and the global AI boom propelling demand for advanced semiconductor processes.
TSMC’s Dominance in the AI Era
TSMC’s technological leadership in the semiconductor industry has positioned it as a key player in the burgeoning field of artificial intelligence. The company’s advanced processes are crucial for powering AI hardware, and it is likely to secure significant orders from major tech companies. This increased demand is expected to contribute to further growth in TSMC’s stock price.
Foreign investors have also expressed confidence in TSMC’s future prospects. Several institutions have raised their target price for the stock, further adding to the positive sentiment surrounding the company.
Semiconductor ETFs Riding the Wave
The rising tide of TSMC’s stock price is positively influencing the performance of semiconductor ETFs. Domestic high-volume ETFs, particularly those focused on semiconductor stocks, have delivered impressive returns in 2024.
Top Performing Semiconductor ETFs
| ETF Name | Year-to-Date Return |
|---|---|
| Shin Kong Taiwan Semiconductor 30 (00904) | 29.67% |
| Mega Taiwan Wafer Manufacturing (00913) | 29.23% |
| Fubon Taiwan Semiconductor (00892) | 25.14% |
| Qunyi Semiconductor Earnings (00927) | 25.08% |
| CITIC Key Semiconductor (00891) | 25.01% |
These ETFs have outperformed the broader market and are attracting substantial investment due to their positive performance and exposure to the semiconductor sector growth.
Factors Driving the Semiconductor ETF Surge
Several factors are driving the current surge in semiconductor ETFs:
- TSMC’s Strong Demand for Advanced Processes: TSMC’s 2nm process is in high demand, leading to increased capital expenditures and bolstering the entire semiconductor supply chain.
- AI Booming: The growing adoption of AI across various sectors is driving demand for advanced semiconductors, benefiting companies like TSMC.
- Positive Outlook for Semiconductor Stocks: The semiconductor sector’s strong performance and the positive outlook for leading companies like TSMC are attracting investors to semiconductor ETFs.
- New Technology Product Launches: New product launches in the electronics sector, such as iPhones and Huawei’s first foldable phone, are further bolstering the semiconductor supply chain and driving growth.
- Strong Corporate Earnings: Companies in the semiconductor sector are expected to report strong second-quarter earnings, further enhancing investor confidence.
- Nvidia’s Upcoming Financial Report: Nvidia’s financial report release on August 23rd is expected to impact the semiconductor sector, and a positive report might further boost stock prices.
Investment Strategies for the Semiconductor Sector
Investors seeking to capitalize on the semiconductor sector’s growth are advised to consider the following strategies:
- Invest in Semiconductor ETFs: Semiconductor ETFs provide diversified exposure to the sector and can be a convenient way to invest in a basket of leading companies.
- Focus on Semiconductor Stocks: Investors can also consider investing directly in individual semiconductor companies, such as TSMC, Nvidia, and other key players in the industry.
- Monitor Industry Trends: Staying informed regarding the latest developments in the semiconductor industry, including advancements in technology, regulation, and market demand, is crucial for making informed investment decisions.
Conclusion
TSMC’s strong performance and the rising tide of semiconductor ETFs indicate a promising outlook for the sector. With the AI boom driving demand for advanced semiconductors, investors are well-positioned to benefit from this burgeoning sector. However, it’s important to conduct thorough research and consider the risks involved before making any investment decisions.