Key Takeaways
- TSMC shares rebounded as AI enthusiasm offsets geopolitical concerns between the U.S. and China.
- Taiwan’s Ministry of Economic Affairs assured minimal disruptions from China’s rare earth export restrictions.
- TSMC’s solid revenue growth is driven by strong demand for advanced semiconductors, particularly in AI and high-performance computing.
Market Overview
Taiwan Semiconductor Manufacturing Co. (TSMC) shares experienced a notable rebound in premarket trading on Monday, recovering from losses the previous Friday. This resurgence was largely due to heightened investor interest in artificial intelligence, balancing against the backdrop of increasing geopolitical tensions between Washington and Beijing.
Taiwan’s Ministry of Economic Affairs has sought to allay fears that China’s recent extension of rare earth export controls would significantly impact the island’s vital semiconductor sector. Despite Beijing’s addition of five new rare earth elements to its restricted export list and tightened regulations on chip-related exports before the upcoming talks between Trump and Xi, Taiwan’s semiconductor manufacturers are anticipated to remain largely unaffected. Most rare earth materials required for Taiwan’s semiconductor production are sourced from the United States, the European Union, and Japan.
As the world’s largest contract chipmaker, Taiwan is expected to maintain robust advancement in chip production, particularly for applications in artificial intelligence and high-performance computing. However, officials have cautioned that China’s restrictions could disrupt global supply chains that depend on rare earth materials, notably in sectors like electric vehicles and drones.
The effects are already being felt among leading Chinese tech firms such as Alibaba and Baidu, which have experienced market declines. In contrast, shares of rare earth producers have surged amid expectations for ramped-up domestic production in the U.S.
In terms of financial performance, TSMC continues to show significant growth. The company reported a consolidated net revenue of 330.98 billion New Taiwan dollars for September 2025, marking a 31.4% increase year-over-year, although slightly down by 1.4% from August. This revenue growth was driven by strong global demand for advanced semiconductor nodes that support AI and high-performance computing.
Year-to-date, TSMC’s stock has rallied over 42%, significantly outperforming the Nasdaq 100’s 15% increase in the same timeframe. Cumulative revenue for the first nine months of 2025 rose by 36.4% year-over-year to 2.76 trillion New Taiwan dollars. This upward trajectory aligns with TSMC’s accelerated rollout of its 3-nanometer production technology and the ongoing development of next-generation 2-nanometer technology in its facilities located in Taiwan and Arizona, bolstered by demand from key clients such as Apple and Nvidia.
As of the latest premarket check on Monday, TSM stock was up 5.19% at $295.24.
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