It’s been a super year for investors in Taiwan Semiconductor Manufacturing (NYSE: TSM). At the time of writing, the stock is up 43% this year and increased by 11.4% in the week ending Friday, according to data provided by S&P Global Market Intelligence.
This week’s move comes amid more positive news that encouraged investors to believe the semiconductor industry is set for an upswing in 2024, driven by demand for high-performance computing for artificial intelligence (AI) applications.
Taiwan Semiconductor’s sales data
The company publishes monthly sales data, and the latest release for February shows that its sales were up 11.3% from February of last year. In addition, its January to February sales are up 9.4% compared to the same period of 2023.
It’s a positive development that helps confirm a recovery in the industry. Industry data also back it up. For example, earlier in the week, the Semiconductor Industry Association, using data compiled by the World Semiconductor Trade Statistics (WSTS) organization, announced that global semiconductor industry sales rose 15.2% in January compared to January 2023.
Moreover, the Semiconductor Equipment Association of Japan reported 5.2% year-over-year growth in Japanese equipment billings in January, the first month after seven months of consecutive year-over-year declines.
What’s next for Taiwan Semiconductor?
Everything points to an ongoing recovery in the semiconductor industry, as AI applications more than offset relatively slow smartphone demand. Meanwhile, the CHIPS Act continues to support investment in the U.S. by the likes of Intel and Taiwan Semiconductor. The company is on track to hit its low-to-mid-20% revenue growth target in 2024.
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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Taiwan Semiconductor Manufacturing. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short May 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
Why Shares in Taiwan Semiconductor Surged Again This Week was originally published by The Motley Fool
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