US chip stocks surged in pre-market trading on Thursday following a robust sales forecast from Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract chipmaker. TSMC raised its expectations for annual revenue growth, citing that sales from AI chips would contribute a mid-teen percentage of its full-year revenue.
The positive outlook from TSMC, a key producer of advanced AI chips, boosted investor confidence in the broader semiconductor sector, which has seen its market value soar over the past two years due to increased chip spending by major tech companies.
Intel, a struggling chipmaker, also saw its shares inch upward. Intel has been investing in expanding its chip fabrication facilities to compete with TSMC in advanced contract manufacturing, though analysts predict this effort will take years to bear fruit.
TSMC’s forecast provided some relief to investors concerned about slower demand for non-AI semiconductors, following recent deep forecast cuts from chip equipment giant ASML. TSMC’s US-listed shares have climbed more than 80% this year, while Nvidia’s stock has more than doubled, as Wall Street continues to favor semiconductor investments driven by AI technology.
