US investigates TSMC over possible Huawei chip sales, while the company reassures compliance with laws
Taiwan Semiconductor Manufacturing Co. (TSMC) saw its shares hit a record high on Friday, following a strong earnings report and a positive outlook for artificial intelligence (AI) demand.
According to Reuters, TSMC’s shares closed up 4.8 percent at T$1,085 (US$33.77), surpassing the previous record of T$1,080 set on July 11.
This surge gives TSMC a market capitalization of around US$874bn, the highest for any company listed in Asia.
The broader market index (.TWII) also saw gains, ending 1.9 percent higher.
The company's strong performance came after it posted a 54 percent jump in quarterly profit, beating forecasts, and raised its revenue expectations for the year.
TSMC, which supplies major companies like Apple and Nvidia, pointed to the growing AI demand across industries and stated that the next five years would remain ‘healthy.’
However, political uncertainty looms as US media outlet The Information reported that the US Commerce Department is investigating whether TSMC has supplied AI or smartphone chips to China’s Huawei.
The United States has imposed export controls limiting Huawei’s access to non-Chinese chips. In response, TSMC reaffirmed its commitment to complying with laws and regulations, including export controls.
The company stated, “If we have any reason to believe there are potential issues, we will take prompt action to ensure compliance,” adding that it would investigate and communicate with relevant authorities if necessary.
In July 2020, TSMC had announced it stopped taking new orders from Huawei and would no longer ship wafers after September of that year.
Neither the US Commerce Department nor Taiwan’s economy ministry, which oversees export control compliance, commented on the ongoing investigation.
Analysts, such as Venson Tsai of Cathay Futures Consultant in Taipei, believe TSMC’s stock could rise even further, noting that the current share price does not fully reflect the long-term potential of AI.
