Shares of Taiwan Semiconductor Manufacturing Co. (TSMC) surged 5% to a new all-time high on Friday following an announcement by Taiwan's regulator to relax limits on how much domestic equity funds and actively managed ETFs can allocate to individual stocks. The revised framework now allows these funds to invest up to 25% of their assets in any listed company with a weighting above 10% on the Taiwan Stock Exchange, compared to the previous cap of 10% of a portfolio's net asset value for a single company [1].
This regulatory change comes on the heels of TSMC reporting a 58% year-on-year increase in first-quarter profit, reaching a net income of 572.48 billion new Taiwanese dollars for the three months ended in March. This marks the fourth consecutive quarter of record profits for the company, driven by strong demand for semiconductors, particularly from the artificial intelligence sector and major clients such as Apple and Nvidia. Nvidia is now TSMC's largest customer, reflecting the company's pivotal role in supplying advanced processors for high-performance computing applications [1].
TSMC's technological leadership is further underscored by its use of advanced packaging methods such as CoWoS (Chip-on-Wafer-on-Substrate), which supports the growing needs of AI and data center clients. Market sentiment remains bullish, with analysts highlighting that the new regulatory framework could enhance liquidity and concentration in leading Taiwanese equities, potentially supporting TSMC's continued outperformance. Technical indicators point to strong momentum, with TSMC shares breaking previous resistance levels and establishing new support zones amid heightened investor enthusiasm for semiconductor stocks [1].
CONCLUSION
TSMC's record-breaking share performance is fueled by robust earnings, surging AI-driven demand, and favorable regulatory changes. The easing of single-stock investment caps is expected to further boost liquidity and support TSMC's market leadership, reinforcing positive sentiment among investors and analysts.