S&P Global Ratings has changed the outlook on Taiwan Semiconductor Manufacturing's (TPE:2330) AA- long-term issuer credit rating to positive from stable, while affirming the rating, according to a recent release.

The company's solid EBITDA and free operating cash flow expansion amid rising technology and scale challenges for peers support the outlook revision, S&P said.

Revenue and margin strengths have bolstered the company's position in the global semiconductor foundry sector, with a major share in semiconductor foundry services for advanced high-performance computing chips.

The company has a 72% total revenue share among 10 major global foundry service providers, with a revenue scale that is about 8.7 times larger than its closest rival last year, S&P said.

Robust metrics should aid in maintaining an expanding net cash position, even with increased capital expenditure and cash dividends in the next one to two years, the rating agency said.

The company is capable of narrowing business volatility given broad-end applications and technology leadership, even with likely uncertainty in AI investments, S&P said.