TSMC's market value topped $2.28 trillion after the chipmaker surged 5% to a record $439.50, driven by an expanded Nvidia partnership and a planned 15% price increase for its 3nm process.
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TSMC surges 5% to record high as Nvidia partnership, price hike fuel rally
TSMC's market value topped $2.28 trillion after the chipmaker surged 5% to a record $439.50, driven by an expanded Nvidia partnership and a planned 15% price increase for its 3nm process.
"This collaboration will reduce lithography costs by 20% to 50% and accelerate chemical simulation speeds by an average of 50 times," TSMC said in a statement about adopting Nvidia's CUDA-X acceleration libraries and AI models across its manufacturing operations, including computational lithography and wafer fab optimization.
The company expects second-quarter revenue of $39.0 billion to $40.2 billion, with full-year USD revenue growth exceeding 30%. First-quarter gross margin reached 66.2% and net margin was 50.5%. The rumored price increase for the 3nm process — as much as 15% in the second half of 2026, with a potential further 5% to 10% in 2027 — reflects surging demand from AI chips, flagship mobile processors, and high-performance computing.
The rally reflects growing conviction that TSMC's technological lead — manufacturing the world's most advanced chips on its 3nm and upcoming 1.6nm nodes — will sustain pricing power and margin expansion for years. The 1.6nm process, scheduled for the second half of 2026, is expected to cost $45,000 per wafer, roughly 50% more than current leading-edge prices.
At the Computex conference in Taipei, Nvidia unveiled the "RTX Spark" PC chip built on TSMC's 3nm process, with multi-brand products from Dell and Lenovo expected to hit the market starting in fall 2026. While the PC chip market is smaller than TSMC's AI business, the partnership expansion deepens integration between the two companies. Nvidia will now use its own AI technology to automate TSMC's chip fabrication plants, a move that could reduce manufacturing costs and cycle times.
TSMC's Taiwan-listed shares have gained more than 50% this year, outpacing the ADRs, which have risen less than 40%. The premium of TSMC's American Depositary Receipts over its Taipei-listed shares has narrowed to a two-year low of 13.7% in May, down from 26% in December, suggesting local investors are more optimistic about the AI cycle than their US counterparts.
The stock gave up some of its early gains on profit-taking, closing flat on the Taiwan Stock Exchange after hitting an intraday record of NT$2,415. The price hike rumors have not been officially confirmed, and investors are awaiting clarity from TSMC's annual shareholders' meeting on June 4, where the company is expected to discuss second-half operational outlook, capital expenditure plans, and board expansion.
TSMC trades at roughly 22 times forward earnings, a premium to the broader semiconductor sector, reflecting its dominant position in advanced chip manufacturing. With no credible competitor below 3nm — Samsung Foundry has struggled with yield issues and Intel's foundry ambitions remain years away from scale — TSMC's pricing power appears secure for the foreseeable future.
This article is for informational purposes only and does not constitute investment advice.
[1] Nvidia AI Partnership and Price Hike Expectations Provide Dual Boosts, Why Did TSMC Still Pull Back After Hitting Highs? - TradingKey[2] Nasdaq, S&P 500 Futures Open June On Strong Footing: Why NVDA, DELL, HPE, TSM, TSLA, SPCE, RVMD Are In Focus - Stocktwits[3] Japan, S Korea, Taiwan Stocks Hit Record Highs; SoftBank Surges 14% to Overtake Toyota as Japan's Most Valuable Firm; Samsung Electronics Jumps 10% - AASTOCKS.com
