Taiwan Semiconductor Manufacturing Company Ltd. (TSMC) saw its stock rise by 3.4% on January 21, 2025, closing at $218.70, up from the previous close of $211.50. The stock opened at $214.46 and reached an intraday high of $220.15, with trading volume significantly above average at 17,125,226 shares. The upward movement was primarily driven by the announcement of a $1.5 billion subsidy from the U.S. government, as disclosed by TSMC's CFO, Huang Ren-zhao. This financial support is expected to bolster TSMC's investment plans in the U.S., enhancing investor confidence. Additionally, the company's quick recovery from a recent earthquake in Taiwan, which caused only minor disruptions, further reassured the market of TSMC's operational resilience.
The positive sentiment was also supported by a report highlighting TSMC's plans to increase FY25 capital expenditure by 34%, driven by strong demand for AI-related technologies and the ramp-up of its N2 process node. Despite concerns about potential peak gross margins, the structural improvements in productivity and utilization are seen as mitigating factors. The market's reaction reflects optimism about TSMC's growth prospects and its strategic positioning in the semiconductor industry.