tsmc stock: bargain alert or falling knife?

2025-04-07 tsmc

Taipei, Monday, 7 April 2025.
experts believe tsmc stock might dip below nt$800. this could be a golden chance for investors. the potential drop is due to recent market weakness. investor sentiment is shaky regarding future performance. tsmc’s adr already plummeted by 14% due to trump’s tariffs. analysts suggest this could drag the stock price down further. one expert even warned that the stock’s decline may be hard to stop short-term.

geopolitical pressures mount

Political tensions are exacerbating the stock’s instability [4]. Professor Yin Nai-ping from National Chengchi University cautioned that ongoing criticisms from U.S. officials regarding Taiwan’s chip industry could spell trouble for TSMC [4]. These concerns stem from accusations that Taiwan is taking chip business away from the U.S., leading to potential retaliatory measures [4]. Despite TSMC’s increased investment in the U.S., these issues could continue to negatively impact its stock performance [4].

expert analysis and market predictions

Financial expert Ruan Mu-hua suggests that if TSMC’s stock experiences a limit down, it could reach NT$848 [4]. He also noted that a similar drop to last year’s 8% decline could send the Taiex index down to 19,594 points, breaching previous lows [4]. However, not all experts are pessimistic. Li Fang-kuo, Chairman of Tung-Hwa Investment Consulting, believes a price of NT$900 is reasonable based on an estimated EPS of NT$60 and a price-to-earnings ratio of 15 [4]. He advises against bottom-fishing this week, anticipating positive news from TSMC’s upcoming April 17th investors conference [4].

government intervention and market stabilization

In response to potential market instability, Taiwan’s Financial Supervisory Commission (FSC) is taking measures to stabilize the stock market [2]. These include lowering the limit on securities lending for intraday trading to 3% and raising the margin ratio to 130% [2]. These measures, effective from April 7th to April 11th, aim to mitigate potential large-scale declines [2]. The Taiwan Stock Exchange is also expected to announce further countermeasures [2]. These interventions reflect concerns about potential ‘unquantifiable’ collapses and the risk of margin calls triggering a downward spiral [2][4].

monitoring financial health

Tsai Ming-han, Associate Manager at Cathay Futures Consulting, advises close monitoring of the overall financing maintenance ratio of credit transactions [4]. A sharp index decline could reduce the maintenance ratio from over 150% on April 2nd to 140%, potentially triggering margin calls if the ratio falls further to 130% [4]. This scenario could lead to a cascade of selling, creating a snowball effect and increasing the risk of forced liquidations [4]. Investors should closely watch these indicators to gauge the overall health and stability of the market [4].

Bronnen

tsmc stock buying opportunity