SinoPac Financial Holdings chief economist Jack Huang expects chipmaker Taiwan Semiconductor Manufacturing Co TSM to grow its business by 20% in 2025.

What Happened: Huang said Wednesday that Taiwan Semiconductor could also be pivotal to an expected Taiex rally in the first half of 2025.

Taiex is the benchmark weighted index on the Taiwan Stock Exchange (TWSE).

Taiwan Semiconductor will continue to capitalize on the demand frenzy for electronics used in artificial intelligence (AI) applications, leading to the surge in the Taiwanese stock index.

Also Read: Intel’s New CEO Change Unlikely To Help Gain Traction Versus Taiwan Semi And Nvidia: Analysts

Huang told the Taipei Times that he expects a 2025 GDP growth of 2.96% for Taiwan, factoring in global economic uncertainties as US President-elect Donald Trump takes charge and implements the tariffs.

Sharon Lin of SinoPac Securities shares a similar sentiment, expecting tariffs to fuel inflation and dampen the chances of a US Fed rate cut in 2025.

SinoPac Financial expects the US dollar to hold up despite Trump’s protectionist practices, which are a tailwind for export-oriented economies, including Taiwan.

Reportedly, Taiwan Semiconductor accounts for 36% of Taiwan’s index weighting.

Recent reports indicated Taiwan Semiconductor is considering producing the front-end process of Nvidia Corp NVDA Blackwell AI chips at the contract chipmaker’s Arizona plant. Taiwan Semiconductor’s current Arizona plant customers include Apple Inc AAPL and Advanced Micro Devices Inc AMD.

Taiwan Semiconductor is expanding its footprint beyond its hometown to help countries consolidate their semiconductor supply chain and reduce dependence on China. However, the chipmaker insists on maintaining its hometown’s key advanced production facilities.

Investors can gain exposure to the semiconductor index through VanEck Semiconductor ETF SMH and iShares Semiconductor ETF SOXX.

Price Action: TSM stock is down 1.02% at $202.21 at last check Friday.

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