What IDM 2.0 Slump? TSMC Continues Recovery Hitting Weekly High

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Fears from investors that Intel (NASDAQ:INTC) would be taking a material amount of Taiwan Semiconductor Manufacturing Company’s (TPE:2330) business seem to have subsided, as the IDM 2.0 sell-off by foreign investors has flipped this week with a buy-back and the company’s stock breaching past the 600 NTD mark.

Data from the Taiwan Stock Exchange shows that in the two days after Intel’s IDM 2.0 announcement foreign investors sold off approximately 81 million shares of TSMC stock. Local retail dealers also sold off 765,487 units while local security trust companies bought approximately 240,000 units. But as consensus formed that Intel’s foundry play might not be the threat to TSMC that some had imagined — and perhaps instead compliment it — investor sentiment changed. As the trading week began in Taipei, foreign investors bought back 6.8 million shares.

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According to Focus Taiwan, TSMC’s American Depository Registry (its US listing) gains pushed the company’s market capitalization past the $600 billion mark to $604.49 billion. This means it's a more valuable firm than Warren Buffett's Berkshire Hathaway ($591.03 billion) and Tesla ($593.87 billion).

Overall the stock’s performance could be buoyed by rumors of a massive impending price hike: as Wccftech previously reported, citing local Taiwan media, TSMC will have increased its 12-inch wafer prices by $400 for a 25% year-over-year increase.   

Digitimes also reported that TSMC is running ahead of schedule with its new N4 node, which has already been fully booked by Apple to power its next-generation Macs. TSMC’s N5P node is also lined up for the next-generation iPhone processor, the A15. 

13F filings, which show institutional ownership of shares, have TSMC’s ADR climbing up the ranks of fund managers’ holdings. According to filings, there was a 30% bump in TSMC’s place in top-10 holdings, and a 25% jump overall in new positions. 

Overall, foreign investors seemed to have an appetite for exposure to Taiwan’s semiconductor industry. Data from the TWSE shows that foreign investors bought 10.33 million shares of UMC (TPE:2303) and ASE (TPE:3711).

The author has no position in any of the stocks mentioned. WCCF TECH INC has a disclosure and ethics policy.
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