TAIPEI (Reuters) – The Taipei-listed shares of TSMC hit a record high on Friday after the world’s largest contract chipmaker posted forecast-beating third-quarter earnings and gave a rosy outlook for strong artificial intelligence (AI) demand.

Shares closed up 4.8% at T$1,085 ($33.77), surpassing the previous record of T$1,080 on July 11. That gives TSMC a market capitalisation of about $874 billion, the highest of any company listed in Asia. The benchmark index ended 1.9% higher.

The company, however, appeared to face some political uncertainty after U.S. media outlet the Information said the U.S. Commerce Department was investigating if it had been making AI or smartphone chips for China’s Huawei, whose access to non-Chinese chips has been curbed by U.S. export controls.

TSMC, which counts Apple and Nvidia amongst its customers, has benefited from a surge towards AI across a spectrum of industries.

TSMC reported a forecast-beating jump of 54% in quarterly profit on Thursday, raised its revenue forecast for the year and said the next five years would also be “healthy”.

The stock could go higher still, said Venson Tsai, an analyst at Cathay Futures Consultant in Taipei.

“TSMC’s share price hasn’t fully reflected the rising wave of AI long term,” he said.

After the report of the U.S. investigation, TSMC said on Friday it was a law-abiding company and committed to complying with laws and regulations, including export controls.

“If we have any reason to believe there are potential issues, we will take prompt action to ensure compliance,” it said.

Such action would include holding investigations and proactively communicating with parties such as customers and regulatory authorities as required, it added.

The U.S. commerce department declined to comment, as did Taiwan’s economy ministry, which is charged with making sure export controls are followed.

In July 2020, TSMC said it had stopped taking new orders from Huawei and did not plan to ship wafers after that September.($1=32.1190 Taiwan dollars)

(Reporting by Ben Blanchard; Additional reporting by Karen Freifeld in Washington; Editing by Muralikumar Anantharaman and Savio D’Souza)