Taiwan's largest company, Taiwan Semiconductor Manufacturing Co's (NYSE:TSM) overseas unit, Taiwan Semiconductor Global, is facing a currency risk – the Taiwanese dollar is strengthening against the now volatile and weakening U.S. dollar.
TSMC Global Ltd. is preparing to raise $10 billion by issuing new shares to manage currency volatility and maintain capital flexibility.
TSMC is the primary chip supplier for tech giants like Nvidia Inc. (NASDAQ:NVDA), Apple Inc. (NASDAQ:AAPL) and Microsoft Inc. (NASDAQ:MSFT).
Also Read: Nvidia Supplier Taiwan Semiconductor Posts 40% Topline Growth In May, Stock Surges
What Happened
The share issuance plan was first reported to Bloomberg. TSMC Global Ltd., the offshore unit of Taiwan Semiconductor Manufacturing Co., will issue the stock to support foreign exchange hedging operations.
This marks the third such equity move since 2024, and it is the largest to date. The timing coincides with the recent appreciation of the Taiwan dollar.
The central bank has warned against speculation after the currency's sharp rise in May, which marked its largest single-day gain since the 1980s.
Analyst Philip McNicholas from Robeco told Bloomberg that the rising volatility may be prompting banks to reassess margin requirements, making capital injections from share issuances a useful tool for companies.
TSMC's CEO C. C. Wei informed shareholders this month that the stronger currency has reduced the firm's operating margin by several percentage points.
Taiwan Semiconductor stock surged 28% in the last 12 months. The chipmaker has also explored commercializing its advanced 2-nanometer process using gate-all-around (GAA) technology in the second half of 2025. It plans to start 2-nm production simultaneously at its Baoshan and Kaohsiung facilities within Taiwan's Hsinchu Science Park.
In April, Taiwan Semiconductor reported first-quarter net sales of $25.53 billion, up 41.6% year-over-year, topping the analyst consensus estimate of $23.92 billion. However, net sales declined 3.4% quarter over quarter. Taiwan Semiconductor guided second-quarter 2025 revenue of $28.4 billion-$29.2 billion, versus the $26.79 billion analyst estimate.
Price Action: TSM stock gained by 1.20% to $222.74 on Wednesday.
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