tsmc's market value dips amid trump tariff fears
Taipei, Thursday, 20 February 2025.
tsmc’s market capitalization has fallen out of the global top 10, now ranking 11th, as investors react to the possibility of new tariffs imposed by the trump administration. these tariffs, potentially as high as 25% on semiconductors, have sparked concerns about the chipmaker’s profitability and competitive edge. the us is considering applying these tariffs to cars, semiconductors, and pharmaceuticals. the announcement about tariffs may come as early as april 2, adding further pressure to tsmc and the broader tech market.
stock performance and market reaction
On February 19, 2025, TSMC’s stock experienced a decline, dropping 10 New Taiwan dollars, which is 0.91% decrease [1]. This downturn reflects broader market anxieties regarding potential trade restrictions and their impact on the semiconductor industry [2]. The proposed tariffs coincide with existing concerns about the US potentially pushing TSMC to take over Intel’s US semiconductor plants, raising fears of technology outflow and increased operational burdens [7]. Such pressures contribute to market uncertainty, influencing investor behavior and TSMC’s valuation [3].
tariff impact and geopolitical factors
Trump’s repeated claims that Taiwan has ‘stolen’ the chip industry add geopolitical tension to the economic concerns [1]. The potential 25% tariff on semiconductors and other products could reshape global supply chains and trade dynamics [3]. Experts suggest TSMC should focus on expanding its production capacity in Arizona and strengthening its advanced chip packaging capabilities [1]. TSMC’s President C.C. Wei has expressed concerns about the challenges faced by the Arizona plant, indicating the complexities of international expansion [1].
tsmc’s strategic considerations
TSMC’s leadership, including founder Morris Chang and Chairman C.C. Wei, has historically shown limited interest in collaborating with Intel [1]. Recent reports suggest that TSMC and Broadcom might explore acquiring different Intel departments, signaling potential shifts in the competitive landscape [1]. With advanced packaging expected to surpass non-advanced packaging in 2025, reaching 51.03% of the total packaging market, TSMC’s expertise in advanced processes and CoWoS technology positions it as a key player [2]. The US reliance on Taiwanese manufacturers for mature process capacity further complicates the tariff situation [2].
broader market context
The potential tariffs are part of a broader trend of trade tensions, with the US previously increasing tariffs on China’s mature process chips [2]. These measures occur amid general market uncertainty, with investor pessimism towards US stocks reaching levels not seen since 2023 [3]. While the S&P 500 has recently hit record highs, driven in part by Intel’s surge, concerns remain about future market stability and the impact of trade policies [3][6]. The interplay of these factors continues to shape the outlook for TSMC and the semiconductor industry [3].