If you think about the most valuable Asian companies, Alibaba or Tencent are the first to come to mind. Yet, they are no longer at the top. Taiwan Semiconductor Manufacturing has recently become the number one company by valuation in Asia. The world’s largest chipmaker, Taiwan Semiconductor Manufacturing (TSMC), has overtaken China’s biggest tech giants by market capitalization, having reached $600 billion amid surging demand for semiconductors. TSMC has beaten China’s Tencent Holdings Ltd. which lost 33% over the past year due to Beijing’s regulatory crackdown on the tech sector. According to FactSet, Tencent’s market cap is currently standing at $569 billion. In the S&P Global Market Intelligence ranking, TSMC is the world’s 9th most valuable company by market cap, just behind Berkshire Hathaway. The Taiwan-based company is also the largest component of the MSCI Emerging Markets Index, comprising 7% of it. Since the start of 2021, TSMC’s stock has risen by 4%. “The technology gap between TSMC and its competitors is widening. That's why we like the stock,” Thomas Wong, founder and chief investment officer at Optimas Capital Limited, said. Chips produced by TSMC are used in iPhones, computers, and cars. According to the Semiconductor Industry Association (SIA), the Taiwanese firm accounts for more than 90% of global output of the most advanced semiconductors. Analysts and investors believe that the company’s current market value is justified.
