Taiwan Semiconductor Manufacturing will benefit from the same tailwinds in 2026 as it did in 2025.In January 2025, I predicted that Taiwan Semiconductor Manufacturing (TSM +2.21%) would rocket higher throughout the year. That prediction ended up being dead-on, as the stock soared nearly 54% higher throughout 2025. That's an impressive one-year return for the computer chip manufacturer and it would cause some investors to hesitate on the stock, thinking it has already had its run. But I'm not ready to give u ...

Asian shares have mostly advanced, tracking Wall Street, after US President Donald Trump walked back from imposing tariffs on eight European countries over Greenland and ruled out using military force to take control of the territory.The future for the S&P 500 gained less than 0.1 per cent and that for the Dow Jones Industrial Average was virtually flat on Thursday.Tokyo’s Nikkei 225 climbed 1.7 per cent to 53,688.89, with technology stocks leading gains. SoftBank Group jumped 11.6 per cent and equipment ma ...

Core Viewpoint - ASML, the largest manufacturer of chip-making equipment, reached a market value of over $500 billion following TSMC's announcement of increased capital spending plans to meet the rising demand for AI chips [1][2]. Group 1: ASML's Market Position - ASML's shares rose by 5.4% after TSMC's announcement, contributing to a total increase of 24% in January [2]. - ASML is now recognized as Europe's most valuable company [2]. Group 2: TSMC's Capital Spending Plans - TSMC increased its capital spending forecast for 2026 to between $52 billion and $56 billion, exceeding market expectations of $46 billion, representing a potential increase of up to 21% in spending on chip-making equipment [2]. - This heightened spending from TSMC is in response to increased demand from other manufacturers like Micron and Korean memory chip producers [4]. Group 3: Industry Demand and Growth Outlook - Analysts indicate that ASML stands to benefit significantly from the AI boom, as demand for AI-related chips is growing faster than anticipated [3]. - Despite ASML's forecast of only modest growth for 2026, TSMC's plans to accelerate factory construction suggest a strengthening outlook for ASML into 2027 and beyond [4][5].

Group 1 - The United States and Taiwan have reached a trade deal that reduces tariffs on Taiwanese goods in exchange for $250 billion in new investments in the U.S. tech industry [1][4] - The tariff on Taiwanese goods has been reduced from an initial 32% to 20%, and now to 15%, aligning it with rates for other U.S. trading partners in the Asia-Pacific region [2] - The U.S. Department of Commerce described the deal as a "historic trade deal" aimed at reshoring America's semiconductor sector and establishing "world-class" U.S.-based industrial parks [3] Group 2 - Taiwan's companies are set to invest $250 billion in sectors including semiconductors, artificial intelligence, and energy, with certain imports from Taiwan being exempt from tariffs [4] - Taiwan Semiconductor Manufacturing Corp. (TSMC), the world's largest chipmaker, announced plans to increase capital spending by nearly 40% this year, following a 35% increase in net profit for the latest quarter [6] - TSMC reported a net profit of 506 billion new Taiwan dollars (approximately $16 billion) for the October-December quarter, exceeding analysts' expectations [7]

Trade Surplus and Exports - China's trade surplus reached a record of almost $1.2 trillion in 2025, driven by strong exports to various global markets despite a decline in shipments to the U.S. due to increased tariffs [1] - Total exports for 2025 rose by 5.5% to $3.77 trillion, while imports remained flat at $2.58 trillion, resulting in a trade surplus of over $992 billion in 2024 [2] - In December, exports increased by 6.6% year-on-year, surpassing economists' expectations, while imports rose by 5.7% [2] Export Dynamics - Exports to the U.S. fell by 20% in 2025, but this decline was offset by significant increases in exports to Africa (26%), Southeast Asia (13%), the European Union (8%), and Latin America (7%) [4] - The largest export category was mechanical and electrical items, which rose by 8.4% from the previous year, while exports of labor-intensive products like furniture and clothing saw declines [6] Economic Impact - Strong global demand for computer chips and automotive exports, particularly electric vehicles, contributed to the growth in exports, with auto exports surging by 21% to over 7 million units [5] - The robust export performance has helped maintain China's economic growth close to its official target of about 5%, raising concerns in other countries about the impact of cheap imports on local industries [6] Future Outlook - Economists anticipate that exports will continue to be a significant growth driver for China's economy in 2026, despite facing a "severe and complex" external trade environment [3][7]

Group 1 - President Trump ordered the divestment of a $2.9 million computer chips deal involving HieFo Corp. due to security concerns [1][3] - The deal, initially announced in May 2024, involved Emcore Corp. selling its computer chips and wafer fabrication operations to HieFo for $2.92 million, which included assuming about $1 million in liabilities [2] - Trump cited "credible evidence" that HieFo's current owner is a citizen of the People's Republic of China, demanding divestment within 180 days [3] Group 2 - HieFo was founded by Dr. Genzao Zhang and Harry Moore, with Zhang previously serving as vice president of engineering at Emcore [3][4] - Plans for the technology acquired from Emcore were to be managed by the same team of employees in Alhambra, California [3] - HieFo's CEO, Zhang, expressed intentions to pursue innovative solutions, including applications in artificial intelligence [4]

Economic Overview - The year has been marked by significant economic shocks and surges, particularly due to changes in global trade dynamics and tariffs imposed by the US [1][6] - Despite these shocks, the global economy has shown resilience, with stock markets in various countries reaching record highs [6][10] Tariff Impacts - The US implemented a sweeping regime of tariffs that affected trade with allies and adversaries alike, with rates reaching as high as 145% for China and 10% for countries like Australia and the UK [11][12] - The chaotic nature of the tariffs, including those placed on uninhabited islands, exemplified the unpredictable environment created by the US administration [8][11] Market Reactions - Following the announcement of tariffs, global stock markets initially reacted with panic, with the S&P 500 index losing $7.5 trillion in value within two days [31] - However, the market sentiment shifted as fears of a trade war subsided, leading to a recovery in stock prices [19][31] AI Boom - The rise of artificial intelligence (AI) has been a significant driver of market performance, with substantial investments in technology and data centers propelling the "Magnificent Seven" tech companies [32][37] - Nvidia, a key player in the AI sector, saw its stock price increase by over 1,200%, making it the most valuable company globally, valued at over $4 trillion [33][36] Economic Growth and Projections - The capital expenditure related to AI is estimated to be close to $500 billion, contributing significantly to GDP growth in the US [37][38] - Economists have noted that while there are concerns about market bubbles, the current growth is supported by genuine earnings growth from leading tech companies [36][39]

Group 1: Market Performance - Asian stocks rose broadly, driven by Nvidia's strong third-quarter earnings and optimistic fourth-quarter forecast regarding the AI cycle [1] - Japanese stocks ended a four-session losing streak, with the Nikkei average rising 2.65 percent to 49,823.94, supported by a weaker yen and a potential stimulus package of 21.3 trillion yen ($135.38 billion) [3][4] - The Kospi average in South Korea jumped 1.92 percent to 4,004.85, with major tech stocks like Samsung Electronics and SK Hynix contributing to the gains [5] Group 2: Sector Movements - Technology stocks led the rally in Japan, with companies like SoftBank Group, Tokyo Electron, and Fujikura gaining between 2-6 percent [4] - In Australia, banks, miners, and gold stocks were the primary drivers of a broad-based market rally, with the S&P/ASX 200 rising 1.24 percent [5] - U.S. stocks fluctuated but ended higher, with the Nasdaq Composite gaining 0.6 percent, influenced by Nvidia's quarterly results [6][7] Group 3: Economic Indicators - The dollar strengthened due to reduced expectations for rate cuts and anticipation of the delayed September U.S. jobs report [1] - The People's Bank of China maintained key lending rates for the sixth consecutive month, contributing to a 0.40 percent drop in the Shanghai Composite index [2]

Core Insights - The company, which produces computer chips crucial for the artificial intelligence sector, reported a revenue increase to $57 billion in its recent quarter [1] Company Performance - Revenue for the recent quarter reached $57 billion, indicating strong demand driven by the AI boom [1]

Market Overview - Global shares have declined significantly, with benchmarks in Tokyo and Seoul dropping over 3% due to the impact of Nvidia and other AI-related stocks pulling U.S. markets lower [1][2] - The S&P 500 and Dow Jones Industrial Average futures are down 0.3%, reflecting concerns over high stock prices in the AI sector [2] Regional Market Performance - Asian markets experienced a downturn, with Japan's Nikkei 225 falling 3.2% to 48,702.98, and South Korea's Kospi dropping 3.3% to 3,953.62 [5][6] - Chinese markets also faced selling pressure, with Hong Kong's Hang Seng declining 1.7% and the Shanghai Composite slipping 0.8% [6] Key Company Movements - Nvidia's stock decreased by 1.8%, although it remains up nearly 40% year-to-date [7] - Other AI-related companies, such as Super Micro Computer, saw significant losses, with a 6.4% drop [7] - Major tech firms in Asia, including Samsung Electronics and TSMC, also reported declines, with Samsung down 2.8% and TSMC down 2.8% [5][6] Economic Indicators - The yield on 30-year Japanese government bonds surged to 3.31%, indicating rising risks associated with government spending and national debt management [4] - Anticipation of U.S. employment data release is affecting market sentiment, with potential implications for Federal Reserve interest rate decisions [3][10]