Taiwan Semiconductor Manufacturing Company (TSM) continues to command investor attention, riding high on the artificial intelligence wave that's reshaping the semiconductor landscape.

Export License Clears Path Forward

TSMC shares rallied on Friday after securing a crucial one-year US export license that keeps American chipmaking equipment flowing to its China operations. The US Department of Commerce approved the annual license covering Taiwan Semiconductor's Nanjing fabrication plant, streamlining what could otherwise be a bureaucratic nightmare.

Here's why this matters: the approval means US-controlled tools can ship without requiring separate approvals from individual vendors. That's the difference between seamless manufacturing and potential production headaches. For TSMC, it translates directly into stable product deliveries and predictable operations at a time when chip supply chains remain under intense scrutiny.

The stock has climbed roughly 51% over the past 12 months in the US market, and Friday's news only added fuel to that momentum.

Taiwan Market Reaches New Heights

Taiwan's stock market opened 2026 at a record high, powered by aggressive buying in AI-related names with Taiwan Semiconductor leading the charge. The Taiex surged 386.21 points, or 1.33%, to close at an all-time high of 29,349.81 on Friday, according to Focus Taiwan.

Turnover jumped to NT$648.84 billion (about $20.66 billion), signaling broad-based participation across large-cap technology stocks. This wasn't just a TSMC story, though the chipmaker certainly drove the narrative.

Foreign Money Floods Back In

Analysts attribute much of the rally to foreign institutional investors returning from holiday breaks and funneling fresh capital into Taiwanese equities. The strength of the Taiwan dollar acted as a major catalyst behind the infusion, making these investments more attractive.

Kerry Huang, an analyst at Concord Securities, noted that overseas investors rebuilt positions with Taiwan Semiconductor as their top target. They're betting the chipmaker will deliver positive signals at its investor conference scheduled for January 15. Given that TSMC represents more than 40% of the Taiwan market's total value, what happens to the company essentially determines what happens to the broader market.

Taiwan Semiconductor shares were up 2.83% at $312.50 at the time of publication on Friday, according to market data.