The price gap between Taiwan Semiconductor Manufacturing Co.’s American depositary receipts and its Taipei-listed shares surged to the widest level in more than 16 years, reigniting concerns that the euphoria surrounding artificial intelligence may be overheating.

The chipmaker’s stock in New York traded at an average 24% premium over its local listing in July, up from 17% in April and 7.4% over the past decade, Bloomberg-compiled data show. While TSMC’s ADRs have long been trading at a premium to the Taipei listing, the monthly spread has now reached the widest since April 2009.

“Surging investor awareness of TSMC’s pivotal role in the global AI supply chain has significantly increased demand for TSMC ADRs from US market participants,” said Vincent Fernando, executive director of Zero One, an investment research firm. “However, with the supply of ADRs remaining relatively fixed — and tight headroom for issuing new ones — conversion has become operationally difficult. This has caused an increase in the ADR premium’s trading range.”

TSMC’s ADRs have historically traded at a premium for two main reasons. First, they’re fungible, unlike the Taiwan shares that need special regulatory approval to be converted into the US equivalent. Second, they’re included in gauges like the Philadelphia Stock Exchange Semiconductor Index, meaning that exchange-traded funds tracking them must buy the US version.

Since the release of ChatGPT in 2022, the ADRs have surged more than 190% through Thursday, while the Taipei-listed shares have risen less than 140%. Total foreign ownership in the latter has increased during the period to almost 74%, though it remains below its record level of 80% in 2017, data compiled by Bloomberg show.

To market watchers like Owen Lamont, portfolio manager at Acadian Asset Management, the widening spread flashes a cautious signal.

“When the US ADRs of hot technology companies get overpriced relative to their home shares, that is a sign of a frothy US market,” he said. “I see many signs of market excess today.”