Taiwan Semiconductor Manufacturing Company saw its American depositary receipts climb 5.5% to $348.85 on Friday, while its Taiwan-listed shares closed 0.85% higher at NT$1,780. The broader semiconductor sector experienced significant gains, with the PHLX Semiconductor Index advancing 5.7% during the session.
AI Capex Drives Market Sentiment
The rally reflects renewed investor focus on artificial intelligence infrastructure investments by major technology companies. Market analysts point to growing evidence of genuine demand for AI products and the substantial capital expenditure required to support this expansion. "There's enough evidence that there's real demand for AI products ... and a necessity of a lot of spending to get there," noted Ross Mayfield, investment strategy analyst at Baird.
Capital spending projections have captured Wall Street's attention, with Amazon reportedly planning approximately $200 billion in capital expenditures for 2026, up from $131 billion the previous year. This anticipated spending has investors closely monitoring semiconductor suppliers positioned to benefit from this expansion.
Geographic Expansion and Upcoming Catalyst
Earlier in the week, TSMC CEO C.C. Wei announced plans to begin mass production of advanced 3-nanometer chips at the company's Kumamoto facility in Japan, representing a strategic move to extend its cutting-edge manufacturing capabilities beyond Taiwan. "We believe this fab will ... form a foundation for Japan's AI business," Wei stated during a Tokyo press conference.
Investors are now awaiting TSMC's January sales report, scheduled for release on February 10. This monthly figure typically provides insights into near-term demand trends and often influences market expectations. The Taiwan market will be closed over the weekend, leaving traders to assess whether Friday's momentum will persist when trading resumes on Monday.
While the sector has demonstrated strength, analysts caution that semiconductor stocks remain sensitive to shifts in investment sentiment and potential adjustments to technology company spending plans if concerns about AI profitability resurface.
