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TSMC Joins Nvidia, Intel, AMD in Drawing Biggest Short Volume

$Taiwan Semiconductor Manufacturing(TSM)$  , which has gone under the radar of short sellers, is gaining more attention, landing the stock of the contract chip manufacturer in fourth place for the biggest short volume in the semiconductor industry.

The Taiwanese company ranked behind its customer $NVIDIA(NVDA)$   and rival $Intel(INTC)$   and another customer $Advanced Micro Devices(AMD)$   among the semiconductor stocks that attracted the biggest trading in borrowed shares that were sold short Thursday. The stocks rallied that day, strengthening the case for closing out short positions against them.

TSMC's short volume almost tripled to 3.55 million shares Thursday, from 1.31 million shares a day earlier. That came after the company that supplies almost all of the world's chips used in artificial intelligence reported blow out earnings and painted a better outlook for the industry. 

Thursday's short volume accounted for 8.4% of the total number of TSMC shares that changed hands yesterday, when the stock jumped more than 4%. Weeks before the impressive financial results were released, short sellers have already been paring back their bets against the company.

As of the end of December, the short interest, or the tally of shorted shares that haven't been closed, fell to 23.91 million shares, from 33.71 million at the end of November, the latest exchange data showed. That's just a fraction of the 256.8 million short interest in its second biggest customer $NVIDIA (NVDA.US)$. $Apple (AAPL.US)$ is TSMC's biggest client, accounting for about 22% of its revenue, according to Bloomberg data.

Nvidia remained at the top ranking for short volume, with short sellers boosting their trading activities to about 17.15 million shares, from 13.09 million on Wednesday. Short volume rose as the stock advanced for a third day this week, weakening the case for betting against the $4.6 trillion company that generates the most cash from AI chips.

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