TSMC Rallies as AI Boom and New Rules Ignite Buying

TSMC ( (TSM) ) has risen by 9.89%. Read on to learn why.

TSMC shares climbed 9.89% over the past week as a mix of regulatory tailwinds, booming AI demand, and strategic U.S. expansion drew a fresh wave of investor enthusiasm. A key catalyst was a rule change in Taiwan that lets local funds boost their exposure to individual stocks from 10% to as much as 25% of their portfolios, provided the company is a major component of the market. Because TSMC dominates the Taiwan Stock Exchange, analysts expect substantial domestic fund inflows, helping drive the stock sharply higher.

Strong fundamentals added fuel to the rally. TSMC recently reported a 58% jump in first‑quarter profit and a 35% year‑over‑year revenue increase to NT$1.134 trillion, marking its fourth straight quarter of record earnings. AI and high‑performance computing now account for 61% of total revenue, underscoring the chipmaker’s central role in powering the global AI boom. Analysts have responded by reaffirming bullish ratings, with consensus views sitting at Buy/Outperform and price targets implying further upside from current levels.

Investors were also encouraged by signs of strategic execution and insider confidence. TSMC detailed plans to build a major advanced‑packaging hub in Arizona by 2029, adding CoWoS and 3D‑IC capabilities to ease a critical bottleneck in high‑end AI and data‑center chips and deepen its U.S. footprint. A recent SEC filing showed modest insider share purchases and continued capital management moves, reinforcing the perception that management is aligned with shareholders and positioning TSMC to capture long‑term growth in cutting‑edge semiconductors.