The Taiwan-listed company TSMC, whose revenue outlook is bullish, had its shares trade 3.5% lower on Friday due to persistent geopolitical concerns and overnight losses on U.S.
TSMC’s shares, which are listed on Taiwan and have an optimistic revenue outlook, closed the day on Friday 3.5% lower, weighed down by ongoing geopolitical worries and overnight losses on U.S. markets. The chipmaker had reported solid results. The world’s artificial intelligence boom has helped Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), a significant supplier to Apple (AAPL.O) and Nvidia (NVDA.O), as well as Asia’s most valuable listed company, weather the slowdown in pandemic-driven demand for electronics.
The leading company in the chip sector reported a net profit for the second quarter on Thursday that was above market estimates. Compared to a prior estimate of an increase in the low to mid-20% range, it increased its revenue forecast for 2024 to growth of slightly beyond the mid-20% range in U.S. dollars. The tech-heavy Nasdaq saw its highest one-day decline since December 2022, while the chip industry saw its largest daily percentage decline since the panic of March 2020 connected to the pandemic. On Thursday, all three major U.S. stock indexes saw declines.
The sharp declines in chip equities and the Nasdaq worry us. It’s not just a temporary issue, which we anticipate could level down over the course of the next two to three months,” stated Taipei-based vice president Allen Huang of Mega International Investment Services. “TSMC was dragged down by that trend and Trump’s comments, and its earnings did not exceed market expectations by much,” he stated. Before remarks made public this week by Republican presidential candidate Donald Trump in the United States accusing Taiwan of stealing American semiconductor technology and that the island nation should foot the bill for defense, TSMC’s stock had been rising steadily.
The Taiwan dollar dropped to its lowest point since May 2016, while the country’s primary index (.TWII) finished 2.3% down on Friday. The world’s largest contract chipmaker, TSMC, saw its American Depository Receipts climb by as much as 4% earlier in the day following its earnings call. On Thursday, the stock managed to close at a minor gain of 0.4%. Although TSMC has stated time and time again that it will maintain the majority of its manufacturing, as well as research and development, in Taiwan, the company is also spending $65 billion to construct three plants in Arizona.
TSMC, known as the “sacred mountain protecting the country” due to its crucial position in Taiwan’s export-driven economy, has minimal competition, despite attempts to challenge its supremacy by Intel (INTC.O.) and Samsung (005930.KS).
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