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TSMC Draws Heavy Fund Rotation and Crowded Ownership as AI Buildout Accelerates

Morgan Stanley warns potential LNG and Strait of Hormuz disruptions could threaten Taiwan’s power supply, posing production risk for the chip foundry.

Overview

  • Bank of America reports long-only investors bought non‑U.S. equities in February and sold U.S. stocks, with roughly $17.6 billion flowing into Emerging Markets and $14.9 billion into Asia Pacific as U.S. equities saw about $69.5 billion in outflows.
  • TSMC is the most widely held stock by long‑only funds at roughly 92% ownership globally, and BofA places it among “crowded positives.”
  • Morgan Stanley highlights a new supply‑chain risk from a potential Strait of Hormuz closure and Taiwan’s LNG reliance, noting TSMC uses an estimated 9%–10% of the island’s electricity.
  • TSMC posted February revenue of NT$317.66 billion, down 20.8% from January, with combined revenue for the first two months up 29.9% year over year.
  • To meet surging AI demand, TSMC plans $52 billion to $56 billion in 2026 capital spending, as analysts cite hyperscaler capex around $650 billion this year and McKinsey projects about $7 trillion in AI data‑center buildout by 2030.