What happened
Shares of Taiwan Semiconductor Manufacturing (TSM +1.70%) were running 3% higher at 11:42 a.m. ET on Thursday as much of the computer chip industry was rising on no particular news. The S&P 500 and Dow Jones Industrial Average were also up modestly.
A supplier of Taiwan Semiconductor, however, Tokyo Electron, did boost its profit outlook for the year, citing better-than-expected demand. It said that while many companies had reviewed their investment plans for the immediate future, they chose to continue spending on equipment.
Image source: Getty Images.
So what
Tokyo Electron expects a recovery to take hold in the back half of the year, driven in part by subsidies for chip-related investments by global governments. Also, growing trade restrictions on Chinese chip companies had some accelerating their purchases over concern of being shut out of equipment purchases.
That coincides with Taiwan Semiconductor's own prediction of a second-half rebound, especially for itself. It anticipates it will be able to steal market share from its rivals.
NYSE: TSM
Key Data Points
Apple will be part of Taiwan Semiconductor's long-term growth plans. During the tech stock's earnings conference call, CEO Tim Cook said his company was "all in" on being Taiwan Semiconductor's largest customer at its two new Arizona facilities.
Taiwan Semiconductor will be opening one plant there in 2024 and the other in 2026.
Now what
Despite what many considered to be disappointing earnings, Taiwan Semiconductor's stock has been rising and is now up over 30% year to date, though that's actually middle-of-the-pack performance for the semiconductor industry.
