Why Taiwan Semiconductor Manufacturing Stock Rallied Thursday Morning - Yahoo Finance

Shares of Taiwan Semiconductor Manufacturing (NYSE: TSM) were climbing on Thursday, jumping as much as 3.4%. As of 11:47 a.m. ET, the stock was still up 1.5%.

In the wake of a massive earthquake that struck the island nation earlier this week, the semiconductor specialist shared some positive news with investors.

A relief rally

The most powerful earthquake in more than 25 years struck Taiwan early on Wednesday. Taiwan Semiconductor (TSM) noted that "preventative measures to ensure employee safety and wellbeing were initiated at that time according to procedure, and some fabs were evacuated."

In the wake of this tragedy, the world's largest contract chipmaker shared an update with well-wishers and investors. In a statement, the company said, "All personnel are safe and returned to their workplace shortly after the incident." It added that it "is currently evaluating the impact" on its manufacturing capability.

TSMC reported overnight that it expected to resume operations. "There is no damage to our critical tools including all of our extreme ultraviolet lithography tools," the company said. While there was a small amount of damage, it is working diligently to get things back to normal.

A key player in the artificial intelligence revolution

As the contract chip manufacturer for tech industry titans such as Nvidia, Advanced Micro Devices, and others, TSM is playing a pivotal role in the rapid adoption of artificial intelligence (AI). For example, the company fabricates cutting-edge graphics processing units (GPUs) for Nvidia that are the gold standard for AI processing everywhere.

In fact, well-respected tech analyst Gene Munster of Loup Ventures noted, "About the only thing that can slow AI in the near-term is TSM production challenges."

While the human impact is far more important, investors were also relieved that TSM would be able to resume operations so quickly.

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Danny Vena has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

Why Taiwan Semiconductor Manufacturing Stock Rallied Thursday Morning was originally published by The Motley Fool

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