tsmc's trading volume takes a hit amid chip shortage fears
taipei, Thursday, 17 April 2025.
amid ongoing concerns about the global semiconductor shortage, tsmc’s trading volume experienced a significant drop of nearly 22%, positioning it at 18th in market activity. despite this downturn in trading, tsmc’s stock price saw a slight increase of 0.96% on the same day. this decline reflects investor apprehension regarding tsmc’s immediate performance due to persistent supply chain disruptions. tsmc’s pivotal role in global chip manufacturing places it at the heart of these supply chain challenges.
manufacturing capacity expansion
tsmc has announced intentions to increase its production capabilities and allocate resources toward cutting-edge manufacturing technologies [1]. this strategic move aims to address the ongoing semiconductor shortage and meet the growing demand for advanced chips [GPT]. however, the effectiveness and timeline of these expansion plans remain uncertain [alert! ‘expansion plans need deadline check’]. analysts suggest the market’s reaction, marked by fluctuating trading volumes, stems from these persistent supply chain bottlenecks [1].
geopolitical factors at play
geopolitical tensions, particularly those involving the united states and china, significantly impact tsmc’s operations [4]. tsmc, a taiwan-based company, is central to the so-called ‘chip war’ between the two economic superpowers [2]. with over half of the world’s semiconductor supply originating from tsmc, any trade policy shifts or tariff implementations can have profound effects [2]. president trump’s consideration of tariffs on imported semiconductors introduces additional uncertainty [2].
tariffs and trade tensions
the u.s. government is contemplating tariffs on semiconductors, potentially disrupting global supply chains [6]. president trump has expressed his desire to incentivize domestic chip manufacturing through tariffs, a move that has generated unease within the pharmaceutical industry [2][6]. concerns include potential price increases and the exit of generic drug manufacturers, exacerbating existing drug shortages [6]. the u.s. department of commerce has initiated investigations into the national security implications of semiconductor imports, signaling a more protectionist approach [6].
ai-driven demand and market leadership
the surge in artificial intelligence (ai) is fueling demand for semiconductors, particularly advanced chips [7]. asia, which accounts for approximately 75% of global semiconductor production, is well-positioned to capitalize on this trend [7]. however, trade barriers and geopolitical tensions could fragment the global semiconductor market, impacting tsmc’s market leadership [7]. the asian development bank projects robust growth in semiconductor sales, driven by ai, but also cautions about the risks of trade wars and policy uncertainties [7].