tsmc weathers trump tariff storm: should you hold or fold?

2025-07-21 tsmc

Taipei, Monday, 21 July 2025.
tsmc stock experienced a 1.73% dip, settling at NT$1135, amidst investor jitters over potential Trump tariffs. Social media was ablaze with calls to ‘flee’. But analysts are urging investors to hold steady. They view this as a normal market correction, not a sign of a downward trend for the semiconductor giant. Experts emphasize the company’s robust upward trajectory remains intact. The key takeaway? Don’t panic; this might be a buying opportunity.

tariff uncertainty rattles investors

The dip in TSMC’s stock is attributed to anxieties surrounding potential tariffs proposed by former U.S. President Donald Trump [1]. These tariffs, aimed at the EU and potentially including semiconductors, have triggered market volatility [4][6]. The U.S. government is considering these broad basic tariffs, with implementation possibly before August 1, 2025 [4]. This looming deadline adds pressure, prompting investors to reassess their positions in sensitive stocks like TSMC [6]. The exact scope and details of these tariffs remain unclear, contributing to the overall market unease [6].

analyst consensus: a measured approach

Despite the market’s knee-jerk reaction, several analysts are advising a ‘hold’ strategy for TSMC [1][6]. He Ji Ding, an analyst at Moore Investment Consulting, suggests that the short-term correction is within a reasonable range [1]. He advises current shareholders to hold onto their stock [1]. An analyst from Global Securities also recommends a hold position, citing a combination of geopolitical risks and uncertainties surrounding future trade policies [4][6]. The analyst at Global Investment Group stated that the recent dip is a correction, not a trend [1].

broader market context

The Taiwan stock market experienced a correction, with the TAIEX index dropping by 3.2% [4]. This broader downturn reflects the sensitivity of the market to global economic factors and policy changes [4]. On July 21, the Taiwan stock market corrected, with a low of 23,243 points [4]. TSMC’s stock fell by NT$10, reaching NT$1145 [4]. The Dow Jones Industrial Index also saw a decrease of 142.2 points, a 0.31% drop, closing at 44,342 points [4].

tsmc’s fundamental strength

Despite the tariff concerns, TSMC’s underlying business remains strong [1]. The company is a major player in the AI chip market, which continues to grow [4]. TSMC’s capital expenditure remains robust, with strong demand for its 2-nanometer and 3-nanometer technologies [5]. This ongoing investment in advanced technologies positions TSMC for continued growth [5]. Unified Investment Consulting points to TSMC’s optimistic outlook and strong technical aspects of the Taiwan stock market as favorable factors [4].

geopolitical factors at play

Geopolitical tensions, including discussions of potential tariffs on Taiwanese semiconductor exports, are significantly impacting investor sentiment [4][6]. These discussions, ongoing since early 2025, are fueled by concerns over trade imbalances and potential trade actions against Taiwan [4]. A meeting between Taiwanese officials and U.S. trade representatives is scheduled for August 15, 2025, to discuss these semiconductor tariffs [4]. The outcome of this meeting could significantly influence TSMC’s future prospects and stock performance [4].

Bronnen

tariff concerns tsmc stock