TSMC Shares Surge on Dual Catalysts: Major Nvidia Order and U.S. License Approval

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TSMC's stock closed at $319.68 on Friday, marking a substantial single-day gain of over 5%. This rally was fueled by two significant and concurrent developments: a massive new production order from Nvidia targeting the Chinese market and the receipt of a crucial export license from U.S. authorities.

Adding to the positive momentum was a key regulatory decision from Washington. On January 1, the U.S. government granted TSMC a one-year license, permitting the company to import advanced chipmaking equipment into China. This authorization ensures the continued operation of TSMC's fabrication plants in Nanjing and Shanghai, effectively removing a major overhang that had weighed on the stock since late 2025.

This special exemption is particularly notable given the escalating tech tensions between the U.S. and China. Just one day later, on January 2, President Trump blocked the sale of U.S. chip assets from the firm Emcore to a Chinese buyer on national security grounds. TSMC's ability to secure such a waiver underscores its perceived role as a systemically critical player in the global semiconductor supply chain, highlighting its unique market position.

Nvidia's Demand Signals Billions in Revenue

The primary engine for the share price advance is a substantial new commitment from Nvidia. The graphics processing unit giant has requested a sharp ramp-up in production capacity for its H200 artificial intelligence chips at TSMC's foundries. This surge is driven by exploding demand from Chinese technology conglomerates, with over 2 million units of these AI processors anticipated for 2026 alone.

ByteDance, the parent company of TikTok, exemplifies this trend with plans to invest $14 billion in Nvidia hardware by 2026. As Nvidia's exclusive manufacturing partner, TSMC stands to benefit directly from this wave of expenditure, which should keep the Taiwanese chipmaker's order books robust for the foreseeable future.

Institutional Investors Increase Stakes

Major financial institutions are also demonstrating growing confidence in TSMC. Recent filings show SteelPeak Wealth LLC boosted its holding by 75.3% last quarter. Other investment managers, including Brookwood Investment Group and Altfest L J & Co., also meaningfully expanded their positions in the company.

On the technology roadmap, TSMC remains on track. The company's advanced 2-nanometer manufacturing process is scheduled to enter volume production in the fourth quarter of 2025. This next-generation node promises either a 10 to 15 percent increase in speed or a 25 to 30 percent reduction in power consumption compared to the current 3nm standard. Reports suggest Apple intends to adopt the 2nm chip for its iPhone lineup in 2026.

Market Awaits Q4 Earnings Report

All eyes are now on TSMC's fourth-quarter financial results, scheduled for release on January 15. Analysts are keenly awaiting details on the guidance for the first half of 2026 and the yield rates for the new 2nm process. The consensus view among market experts remains bullish, with price targets ranging from $355 to $400 per share. Should the earnings report confirm margin improvements from the H200 production ramp, the stock could see further gains in early 2026.