Shares of Taiwan Semiconductor Manufacturing (TSM 0.14%) were moving higher as the chip manufacturing giant seemed to benefit from a broader tailwind in the semiconductor industry after Nvidia said it regained approval to sell its H20 artificial intelligence (AI) chip in China. The H20 is a less powerful version of the AI chips it sells in the U.S. and to other allies.
Nvidia is one of Taiwan Semi's biggest customers, and the news set off a broad rally in the sector, with Advanced Micro Devices shares jumping as well.
As of 10:44 a.m. ET, TSMC, as the company is also known, was up 3%.
Image source: Getty Images.
China is back open
In a blog post last night, Nvidia said that CEO Jensen Huang met with President Trump and other policymakers in Washington and received assurance that the company would be granted a license to sell the H20 again to China.
That is big news for both the semiconductor industry and U.S.-China relations. Nvidia stock plunged in April when it said it would take an estimated $5.5 billion write-down after it lost the license to sell H20s, dragging the rest of the chip sector down with it.
Nvidia is one of TSMC's biggest customers, and a bellwether for the industry, so the reopening of the Chinese market bodes well both for it and the leading chip manufacturer.
NYSE: TSM
Key Data Points
What's next for TSMC?
Taiwan Semi is set to report second-quarter earnings on Thursday, which could prove to be another leg up for the stock. The company has already reported monthly revenue, which was up about 38% in New Taiwanese Dollars in the second quarter, and analysts are expecting earnings per share to rise $1.48 to $2.28.
If the company can top that number, the stock, which is already hit an all-time high today, could make another move higher.
