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September 26, 2017

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TSMC shares climb to NT$166.5, market cap sets nat'l record

TAIPEI, Taiwan -- Shares of Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) climbed to NT$166.5 at one point during trading on Monday, resulting in record high capitalization for a single company in the history of the Taiwan Stock Exchange.

The share price, which has been at a 16-year high for days, surged 28 percent, from around NT$130 recorded at the start of 2016.

Thanks to the soaring price, the world's largest contract chip-maker achieved a NT$4.31 trillion market value yesterday.

Lured by the company's strong fundamentals, foreign capital placed a net purchase of 80 million shares on Monday.

The company's sales in May registered at NT$73.57 billion, representing 4.9 percent annual growth. June's number is expected to be released in the near future.

The chip-maker is scheduled to convene an investor conference in mid-July; institutional investors are upbeat that TSMC will disclose more uplifting news at the event.

This optimistic outlook is based on Apple's orders for next generation A10 processors and non-Apple firms' orders relating to mobile and drawing applications. Industry analysts said growing demand for mid- and low-range Android phones also helps, and that substantial growth can be expected between the second and third quarters.

More specifically, analysts expect the company to realize 20-percent growth in the July-September period from the previous quarter.

Semiconductor Industry to Stay Relevant: Morris Chang

While the June number has not yet been released, TSMC forecast second quarter sales to range between NT$21.5 and NT$21.8 billion, up 5.65-7.13 percent from the previous quarter.

A net purchase of 83 million shares in foreign capital was reportedly made for five consecutive days last week.

TSMC Chairman Morris Chang (張忠謀) said in an earlier shareholder conference that he expects good performance in the second half of 2016, and that overall growth for the year will hover between 5-10 percent, better than the industry average.

TSMC's growth momentum is fueled by the company's maturing 16-nanometer production process, while its 10-, 7- and 5-nanometer production processes are also in place.

Chang pointed out at a public event last Friday that renewable energy, biotechnology and the next generation internet will spearhead the advancement of world technologies in the days ahead. Since these developments all require chip insertion, Chang said the semiconductor industry will remain critical in the future.

While Chang forecast future semiconductor industry growth to slow, he maintained that the world cannot live without integrated circuits. The stage of competition will pivot from advanced economies such as the U.S., Japan and Europe to China, India and Southeast Asia, Chang said.

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