Shares of Taiwan Semiconductor Manufacturing Company (TSMC) surged during a heavy trading session last Friday, marking their most significant intraday rise since May. This increase came as the chipmaker reported its first monthly sales improvement since February, with October's revenue jumping 15.7% to NT$243.2 billion ($7.5 billion). The spike in shares and revenue contrasts sharply with a 3.7% contraction in revenue to NT$1.78 trillion over the year's first ten months.
The upturn in TSMC's fortunes can be attributed to a growing demand for chips, driven by an artificial intelligence boom that requires more powerful processing capabilities for large language models. CEO C.C Wei has expressed optimism about the semiconductor industry's recovery from a year-long downturn that followed the post-Covid market slump. As a crucial supplier to tech giants such as Nvidia Corp . (NASDAQ:NVDA) and Apple Inc (NASDAQ:AAPL)., TSMC has forecasted its quarterly sales to reach between $18.8 billion and $19.6 billion, surpassing analysts' expectations.
To achieve its sales target for the quarter, TSMC needs to generate approximately $11.7 billion in revenue before the year ends. The company's positive performance is part of a broader tech sector rally that has also been influenced by Wall Street's recent gains.
In related market movements, Asian markets started Monday on a positive note, following Wall Street's rally despite Moody's (NYSE:MCO) downgrade of the U.S. credit outlook. Technology stocks have been particularly buoyant, benefiting from eased long-term Treasury yields since the beginning of November. The softer labor market figures released on Nov. 3 have prompted speculation about a less aggressive stance from the Federal Reserve, contributing to the stabilization of U.S. 10-year Treasury yields at around 4.646% by Monday.
The U.S. dollar index, while not reaching its post-payrolls-report high of 106.01 from Friday, remained robust with the last trade around 105.80. This financial landscape provides a backdrop for TSMC's recent success and suggests a cautiously optimistic outlook for technology investments as the end of the year approaches.
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