Shares in Taiwan Semiconductor Manufacturing Co. (TSMC) jumped 5% to a new all-time high on Friday. This surge came after Taiwan’s financial regulator announced plans to relax rules on how much funds can invest in a single stock.
Under the new framework, domestic equity funds and actively managed ETFs that focus only on Taiwanese stocks will be allowed to put up to 25% of their money into any listed company that makes up more than 10% of the Taiwan Stock Exchange.
Before this change, a long-standing rule limited fund managers to investing no more than 10% of their portfolio’s total value into a single company. This new rule could free up significant capital to flow into major players like TSMC.
TSMC, whose shares also reached a record high on Thursday, reported a 58% increase in its first-quarter profit last week. This beat expectations as the boom in artificial intelligence continues to drive high demand for advanced chips.
The company’s net income reached 572.48 billion new Taiwanese dollars for the three months ending in March. This marks the fourth quarter in a row of record profits for the chipmaking giant. TSMC is Asia’s most valuable technology company. It produces semiconductors used in a wide range of devices, from everyday consumer gadgets to massive data centers.
The world’s largest contract chipmaker continues to see strong demand for its cutting-edge chips from big clients like Apple. It also benefits greatly from the rapid growth of AI, as it manufactures advanced processors designed by companies such as Nvidia, which is now its largest customer. This regulatory change further solidifies TSMC’s appeal to investors.
