Taiwan Semiconductor Manufacturing Company, better known as TSMC, has dethroned Samsung as Asia's most valuable company.
The Taiwanese company's stock price hit a record high last month to reach a market cap of over 8.02 trillion New Taiwan Dollars (roughly $262.75 billion), thus surpassing Samsung's market cap of 7.97 trillion New Taiwan Dollars (roughly $261.16 billion) to become the most valuable company in Asia.
According to TechNews, TSMC's stock price has risen for a record ten weeks in a row, marking a 40 percent growth this year. This steep rise means the company's stock price has now doubled over the last three years. Its market capitalization has also surpassed Samsung for the first time since its listing in 1994.
Not long ago, Intel replaced Samsung as the number one semiconductor supplier in the world. TSMC's surge now rubs salt into the wounds of the South Korean company.
Samsung's continues to struggle
Even though Samsung's stock price has increased by nearly 35-percent this year, declining prices of memory chips and smartphones, as well as lower demand for OLED displays have hampered its business significantly. The South Korean behemoth is estimating a 56-percent year-on-year decline in operating profit in Q3 2019.
The company saw a similar decline in profit in the previous two quarters as well. And unless the market for memory chips improves, Samsung's struggles are likely to continue.
TSMC, meanwhile, has had a much better 2019 so far. With several high-profile names such as AMD, NVIDIA, and Apple as its customers, demand for its semiconductors has been high. And there are plenty of underlying reasons for the company's success.
TSMC offers flexible supply for all semiconductors need, be it a one-time small scale need, or a long-run partnership. Further, it also lets its customers choose whatever they want to use, from older and less expensive chips to newer, better, and more expensive ones.
The Taiwanese company also does well to reduce capital expenditure by improving the size and performance of the existing chips. It develops new processes by continuously improving the old process, thus reducing R&D costs. For example, TSMC's 12nm process is based on the old 16nm process.
TSMC's 7nm chips saw a huge demand this year. Its customers have reportedly placed their orders for next year as well. While the company continues to invest in the production of 7nm chips, it has also completed the roadmap for the 3nm technology.
The company is reportedly hiring about 8,000 engineers to work on those chips. It is also constructing a $19.5 billion manufacturing plant to facilitate the work.