TSMC breaches NT$900 mark, helps Taiex extend rebound

Taipei, Aug. 7 (CNA) Shares of Taiwan Semiconductor Manufacturing Co. (TSMC) topped the NT$900 (US$27.50) mark Wednesday morning, helping the benchmark Taiex extend its newfound momentum after a recent sell-off, dealers said.

As of 11:05 a.m., TSMC, the most heavily weighted stock in the local market, had risen 3.86 percent to NT$914.00 after its American depositary receipts (ADRs) closed 5.03 percent higher in the United States overnight, while the Taiex had gained 710.79 points, or 3.47 percent, to 21,211.81.

TSMC's gains contributed about 275 points to the Taiex's rise and helped it jump over technical hurdles ahead of the 21,000-point level.

On Tuesday, TSMC rose 7.98 percent, anchoring a 3.38 percent rebound in the Taiex. In the two previous sessions before Tuesday, TSMC had plunged about 15 percent and the Taiex had tumbled 12.42 percent amid volatility on U.S. markets.

On Tuesday in the United States, markets there staged a technical rebound, with the Dow Jones Industrial Average up 0.76 percent and the tech-heavy Nasdaq index up 1.03 percent.

Analysts said buying in TSMC largely reflected optimism toward the chipmaker's operations as the company has forecast strong global demand for its advanced 5 nanometer and 3nm processes and packaging technologies due to a boom in artificial intelligence development.

At an investor conference held in mid-July, TSMC forecast its sales for the third quarter to range between US$22.4 billion and US$23.2 billion, with the median figure up 9.5 percent from a quarter earlier.

The company has also anticipated that its gross margin -- the difference between revenue and the cost of goods sold -- would hit 53.5-55.5 percent in the third quarter, beating the previous market estimate of 53 percent.

For 2024 as a whole, TSMC said its sales will rise 24-26 percent in U.S. dollar terms, an upgrade from an earlier estimate of 21-26 percent.

According to local news media, a U.S. brokerage has issued a target price of NT$1,220 per share for TSMC shares, citing a hike in product prices and an increase in capital expenditure to boost AI development.

Despite its plunge on Friday and Monday, retail investors appeared keen to buy into TSMC's stock through odd-lot trading.

Trading odd lots makes it easier for retail investors to buy high-priced stocks in quantities less than the standard minimum purchase of 1,000 shares.