TSMC stock hits new high after posting forecast-beating earnings
Adds background on TSMC and Huawei and Taiwan economy ministry comment, paragraphs 10, 11
TAIPEI, Oct 18 (Reuters) -TSMC's Taipei-listed shares 2330.TW hit a record high on Friday after the chipmaker posted forecast-beating third-quarter earnings and gave a rosy outlook on strong artificial intelligence (AI) demand.
Shares jumped 6% shortly after the opento reach T$1,100 ($34.25), surpassing the previous record of T$1,080 hit on July 11. That gave TSMC a market capitalisation of around $884 billion, the highest of any company listed in Asia.
The company, however, appeared to face some political uncertainty after U.S. media outlet The Information said the U.S. Department of Commerce is probing whether TSMC has been making AI or smartphone chips for China's Huawei HWT.UL, whose access to non-Chinese chips has been severely curtailed due to U.S. export controls.
As the world's largest contract chipmaker, TSMC, whose customers include Apple AAPL.O and Nvidia NVDA.O, has benefited from a surge towards AI across a spectrum of industries.
TSMC TSM.N, on Thursday, reported a forecast-beating 54% jump in quarterly profit, raised its revenue forecast for the year and said the next five years would also be "healthy."
Venson Tsai, an analyst at Cathay Futures Consultant in Taipei, said the stock could go higher still.
"TSMC's share price hasn't fully reflected the rising wave of AI long term," he said.
Following the media report about the U.S. probe, TSMC said on Friday that it was a law-abiding company and committed to complying with laws and regulations, including export controls.
"If we have any reason to believe there are potential issues, we will take prompt action to ensure compliance, including conducting investigations and proactively communicating with relevant parties, includingcustomers and regulatory authorities as necessary," it said.
The U.S. Commerce Department declined to comment, as did Taiwan's Economy Ministry, which is in charge of ensuring export controls are followed.
TSMC said in July 2020 that it had stopped taking new orders from Huawei and did not plan to ship wafers after September of that year.
($1 = 32.1190 Taiwan dollars)
Reporting by Ben Blanchard; Additional reporting by Karen Freifeld in Washington; Editing by Muralikumar Anantharaman and Savio D'Souza
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