3 Tailwinds Are Lifting TSMC’s Stock to New All-Time Highs

Earlier this year, TSMC (NYSE: TSM) was seemingly stuck in a rut after an escalation of the trade war between the U.S. and China forced it to stop accepting orders from Chinese tech giant Huawei, its second largest customer, which accounted for 14% of its revenues in fiscal 2019. But over the past month, three powerful tailwinds lifted TSMC's stock nearly 50% to an all-time high. Let's review these catalysts to see if that enthusiasm is justified.

Intel (NASDAQ: INTC), TSMC, and Samsung own the world's most advanced chip foundries. Intel's foundry produces its own chips, while TSMC and Samsung manufacture chips for "fabless" companies, which outsource the production of their chips.

These three foundries are engaged in the "process race" to produce ever-smaller chips measured in nanometers (nms). TSMC currently leads the pack in terms of size and transistor density That's why top fabless chipmakers like AMD (NASDAQ: AMD), NVIDIA, Qualcomm, and Apple (NASDAQ: AAPL) all place their orders with TSMC.

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Source Fool.com