TSMC, listed in both Taiwan and New York, briefly broke the $1 trillion market capitalization barrier on Monday, moving it ahead of Tesla as the seventh most valuable technology giant on the stock market.
Also on Monday, Alphabet, Apple and Meta all hit all-time highs.
The top ten of the world’s most valuable companies is led by Microsoft and Apple, followed by AI chip designer Nvidia.
His global stock market valuation is over three trillion dollars on Wall Street.
Alphabet and Amazon, which recently topped the two trillion dollar mark, follow in the ever-changing rankings.
Saudi oil giant Aramco has dropped to sixth place, followed by Meta, TSMC and Tesla.
“The semiconductor industry is now the leading sector in the S&P 500,” CFRA analyst Angelo Zino noted recently.
“It’s taken in the last 15 or 18 months. It shows you how much the world has changed.”
An explosion in worldwide demand for chips, fueled by the rise of computing-intensive generative AI, promises continued expansion for the industry.
Chip-makers are not only attracting investors but also government subsidies.
The Biden administration, for example, has provided billions of dollars in financial aid over several years to help build chip factories in the United States.
Worldwide sales of semiconductors, which include integrated circuits, microprocessors and memory chips, are expected to reach $611.2 billion in 2024, a record for the industry, according to the Semiconductor Industry Association.
Sales are expected to grow 16 percent in 2024 and a further 12.5 percent in 2025, the trade association said.
Nvidia, the designer of graphics processing units (GPUs), is at the forefront of the craze, and has taken Wall Street by storm in recent months.
Nvidia’s GPUs are a critical component in building generative AI, and since ChatGPT’s November 2022 launch, its market capitalization has grown eightfold.
In mid-June, the Santa Clara, California-based group briefly became the world’s most valuable publicly traded company, surpassing Microsoft at $3.3 trillion.
“Nvidia’s GPU chips are the new gold or oil of the technology sector,” said Wedbush Securities analysts.
For him, Nvidia, Apple and Microsoft are now engaged in a “race to a four trillion dollar billion market valuation”.
TSMC, with most of its factories located in Taiwan, is also well positioned to reap the rewards.
While Nvidia, which only designs chips but does not manufacture them, remains tight-lipped about its supply chain, it is widely believed that most of its products are made by TSMC.
The Taiwanese giant, which controls more than half of the world’s semiconductor demand, posted sales of $18.87 billion in the first quarter earlier this year, up 13 percent year-on-year while net income rose 9 percent to $6.97 billion.
As for Nvidia, its quarterly profit reached $14.9 billion, a sevenfold increase over the previous year on sales of $26 billion.
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