TSM vs 2330: Why TSMC's US Shares Trade Above Taipei

Taiwan Semiconductor Manufacturing Co. (TSMC) trades in two places. 2330 is the common share on the Taiwan Stock Exchange (TWSE), priced in New Taiwan dollars. TSM is an American depositary share (ADS) on the New York Stock Exchange (NYSE), priced in US dollars. One ADS represents five shares. Convert five Taiwan shares into dollars and the result is usually lower than TSM’s price: on October 19, 2026 the gap was +12.7%. TSMC’s filings point to one structural reason: under Taiwan’s rules, new ADSs cannot simply be created from Taiwan shares on demand, so the trade that would close the gap is capped.

Prices below are Taiwan Stock Exchange closing prices for 2330 and US regular-session closes for TSM. Exchange rates are the Bank of Korea’s daily USD/TWD rate (ECOS), in NT dollars per US dollar.

What exactly is a TSM share?

TSMC’s annual report on Form 20-F, filed with the US Securities and Exchange Commission on April 16, 2026, sets out the structure:

• The common shares have been listed on the TWSE since September 5, 1994. The ADSs have been listed on the NYSE since October 8, 1997, under the symbol TSM.
• Each ADS represents five common shares. The 20-F also reports earnings “per equivalent ADS” at five times earnings per share.
• Citibank, N.A. is the depositary. As of February 28, 2026, 5,313,450,863 common shares, represented by 1,062,690,167 ADSs, were registered in the name of Citibank’s nominee. That is about 20.5% of the 25,932,524,521 shares outstanding on that date.

So roughly one TSMC share in five sits behind the New York listing. The rest trade only in Taiwan.

How do I work out the gap myself?

Three inputs, all from the same calendar date: the 2330 close in NT dollars, the USD/TWD rate, and the TSM close in dollars.

1. Multiply the 2330 close by 5 to get the Taiwan price of one ADS’s worth of shares.
2. Divide by the USD/TWD rate. This is the “implied” ADS value in dollars.
3. Divide the TSM close by the implied value and subtract 1. A positive result is a premium; a negative one, a discount.

Worked example, October 19, 2026:

Input or step	Value
2330 close (TWSE)	NT$2,420
Five shares	NT$12,100
USD/TWD (Bank of Korea, ECOS)	32.444
Implied ADS value	US$372.95
TSM close (US regular session)	US$420.22
Premium	420.22 / 372.95 − 1 = +12.7%

In dollars, TSM closed US$47.27 above the value of the five shares it represents.

How big has the premium been lately?

Using the same method on every date with both closes, from June 10 to October 19, 2026 (87 pairs; July 3 and September 7 had no US session):

Measure	Premium	Date
Lowest	+6.6%	July 16
Highest	+26.2%	June 30
Median	+12.8%	June 10 – Oct 19
Middle half of days	+10.8% to +15.6%	June 10 – Oct 19

TSM traded above the Taiwan-implied value on all 87 days, and more than 10% above it on 77 of them. Monthly medians ran from +11.6% (August) to +17.0% (June 10 to 30). For a longer view, Acadian Asset Management’s Owen Lamont wrote in October 2024 that the ADRs then cost 20% more than the Taiwan shares, and that the premium had been around 80% in the 2000 tech bubble.

Why does the same-day gap jump around?

The two closes are taken hours apart:

Regular session	Taipei / Singapore	New York
TWSE (2330)	09:00–13:30	21:00–01:30 (20:00–00:30 from Nov 2)
NYSE (TSM), to Oct 30	21:30–04:00	09:30–16:00
NYSE (TSM), from Nov 2	22:30–05:00	09:30–16:00

Taipei and Singapore are both on UTC+8 all year. US daylight saving time ends on November 1, 2026, which moves New York an hour further from Asia. The TWSE closes with a call auction from 13:25 to 13:30 Taipei time, eight hours before the NYSE opens (nine from November 2). TSM’s close comes 14.5 hours after the 2330 close carrying the same date (15.5 hours from November 2). News that breaks in between shows up in TSM first and in 2330 only the next Taipei morning.

The two extremes in the table show this. On June 30, TSM rose 4.9% in New York after Taipei had closed, and the premium reached +26.2%. The next day 2330 rose 3.9% while TSM fell 7.0%, and the gap was back to +12.8%. On July 16, TSM fell 2.3% in New York and the premium narrowed to +6.6%; on July 17, 2330 fell 7.3% in Taipei, and the gap returned to +11.8%. A single day’s reading mixes the lasting premium with that overnight news. A median over many days is a steadier guide.

Why doesn’t the premium disappear?

For most dual listings, a gap this size invites a simple trade: acquire shares in the home market, deposit them with the depositary, receive new ADSs and dispose of them in New York. TSMC’s 20-F explains why that route is narrow:

• New ADSs need regulatory approval. TSMC or the depositary “may not increase the number of depositary receipts by depositing shares” without specific approval from Taiwan’s Financial Supervisory Commission (FSC), except in limited cases. One case lets anyone deposit shares purchased on the TWSE, but only up to the number of shares the FSC previously approved, which in practice means refilling room left when earlier ADSs were canceled.
• Going the other way takes paperwork. A non-Taiwan ADS holder who withdraws the underlying shares must register with the TWSE and appoint a local agent, a local custodian and a tax guarantor. Without these, the 20-F says, the holder could not hold or transfer the shares.

Lamont’s Acadian article makes the same point from the market side: the forces blocking arbitrage have historically included regulations that prevent the creation of new US shares and limit US investors’ access to Taiwan. He lists possible sources of the extra demand for the ADS: investors who do not know the Taiwan shares cost less, investors who are not allowed to own shares in Taiwan, and index funds that must hold the ADS specifically. He writes that he does not know which group is responsible. He also notes that a trader betting on the gap closing takes “a risky bet on the speed of convergence,” since nothing forces it to close by a given date.

The 20-F adds one more factor that moves the dollar comparison: changes in the NT dollar against the US dollar alter the value of the shares in dollars and, with it, the ADS price.

Do TSM holders get the same dividend?

Yes, through Citibank. TSMC’s board approves a cash dividend every quarter. The latest, approved on August 11, 2026 (Form 6-K), is NT$7.0 per share for the second quarter of 2026. The ex-dividend date is December 10, 2026 for both the common shares and the ADSs, and TSMC pays it on January 7, 2027. That is NT$35 per ADS, about US$1.08 at the October 19 rate. The 20-F says cash dividends go to the depositary, which pays ADS holders after deducting any Taiwan taxes. The first-quarter dividend, adjusted to NT$7.00000137 per share, was set to be paid on October 8, 2026.

Taiwan withholds tax at 21% on cash dividends paid to non-resident holders of shares or ADSs, unless a tax treaty sets a lower rate, according to the 20-F.

What else differs between the two?

• Transaction tax. A sale of common shares in Taiwan carries a securities transaction tax of 0.3% of the proceeds. Transfers of ADSs are not subject to it, the 20-F says. At the October 19 close, the tax on five Taiwan shares comes to NT$36.30, about US$1.12.
• Depositary fees. The deposit agreement lets Citibank charge up to US$0.05 per ADS to issue or cancel ADSs. Brokers usually pass these on to the client who creates or cancels.
• Access. Foreign investors in Taiwan-listed shares must register with the TWSE, according to the 20-F. TSM trades on the NYSE in US dollars, in New York hours. Our guide to owning Asian chip stocks from a US account compares the routes.

Is this like SK hynix’s SKHY?

The method is the same; the ratio differs. Each SKHY ADS on Nasdaq represents one-tenth of an SK hynix common share, according to Citibank’s Form F-6, so the Korean price is divided by 10 rather than multiplied by 5. See SKHY vs 000660 for the Korean version of this calculation. For how the closing times line up across Seoul, Taipei, Tokyo and New York, see four closes, one trading day. The Taiwan map shows TSMC’s daily move next to other Taiwan-listed chipmakers.

A premium describes how two markets priced the same claim at two different moments. It does not say which price is right, or where either goes next.