The entry of Taiwanese chip giant TSMC into the elite club of the world’s most valuable companies is further evidence that the generative artificial intelligence revolution is shaking up Wall Street.
TSMC, listed in both Taiwan and New York, briefly broke the $1 trillion market capitalization barrier on Monday, putting it ahead of Tesla as the seventh most valuable tech giant on the stock market.
Also on Monday, Alphabet, Apple and Meta all hit all-time highs.
The top ten most valuable companies in the world are led by Microsoft and Apple, closely followed by artificial intelligence chip designer Nvidia.
Their valuations on the global stock market exceed three trillion dollars on Wall Street.
Alphabet and Amazon, which recently topped $2 trillion, follow in an ever-changing ranking.
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Saudi oil giant Aramco fell 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 been taken over the last 15 or 18 months. That shows you how much the world has changed.”
Booming global demand for chips, boosted by the rise of computer-intensive genetic artificial intelligence, promises continued expansion for the industry.
Chipmakers are not only attracting investors but also a host of government subsidies.
The Biden administration, for example, has provided tens of billions of dollars in financial support over several years to help build chip factories in the United States.
Global sales of semiconductors, which include integrated circuits, microprocessors and memory chips, are expected to reach $611.2 billion in 2024, an industry record, according to the Semiconductor Industry Association.
Sales are expected to grow by 16% in 2024 and a further 12.5% in 2025, according to the trade body.
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Graphics processing unit (GPU) designer Nvidia is leading the craze and has been taking Wall Street by storm in recent months.
Nvidia GPUs are a critical component in building artificial intelligence, and since ChatGPT launched in November 2022, its market capitalization has increased eightfold.
In mid-June, the Santa Clara, California-based conglomerate briefly became the world’s most valuable publicly traded company, ahead of Microsoft at $3.3 trillion.
“Nvidia’s GPU chips are the new gold or oil in tech,” said analysts at Wedbush Securities.
For them, Nvidia, Apple and Microsoft are now engaged in the “race for the valuation of the four trillion dollar market”.
TSMC, with most of its factories based in Taiwan, is well positioned to reap the benefits as well.
While Nvidia, which only designs chips but does not manufacture them, remains tight-lipped about its supply chain, it is widely believed that the bulk of its products are manufactured by TSMC.
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The Taiwanese giant, which controls more than half of global semiconductor demand, earlier this year posted first-quarter sales of $18.87 billion, up 13 percent year-on-year, while net profit rose 9 percent to $6.97 billion. dollars.
As for Nvidia, its quarterly profit came in at $14.9 billion, up sevenfold from a year earlier, on sales of $26 billion.
Source: AFP