tsmc faces critical resource squeeze amid geopolitical headwinds

2025-08-24 tsmc

taipei, Sunday, 24 August 2025.
the economist warns that tsmc’s impressive growth may be unsustainable. geopolitical tensions and taiwan’s limited resources pose significant challenges. tsmc’s revenue has soared, reaching $88 billion in 2024, with a market capitalization exceeding $1 trillion. however, sp global forecasts tsmc could consume nearly 25% of taiwan’s power by 2030. coupled with talent shortages and land scarcity, these factors could impact tsmc’s expansion and stock performance (TSM). investors should closely watch these developments.

global expansion and cost concerns

tsmc is undertaking a $190 billion global expansion, including a $165 billion investment in arizona [1]. this expansion aims to diversify risk and strengthen ties with allies [1]. however, amd ceo suzi powell estimates arizona production costs could be 20% higher than in taiwan [1]. tsmc has sent thousands of engineers to the u.s. for training to replicate its work culture [1]. these increased costs and operational challenges in new locations could affect tsmc’s profitability and stock value.

taiwan stock market impact

concerns over u.s. plans to acquire a stake in tsmc through subsidies triggered a stock market downturn in taiwan [2]. on august 20, the taiex index fell 728.06 points, a 2.99% drop, making it the worst-performing major asian market that day [2]. despite this, taiwan’s financial supervisory commission (fsc) stated that the stock market’s fundamentals remain sound, with a price-to-earnings ratio of 18.89 and a cash dividend yield of 2.82% as of july [2]. the fsc is monitoring international developments and will implement appropriate measures as needed [2].

expert opinions and market outlook

analysts suggest that the recent market correction is a healthy adjustment after a significant rally since april [2]. ai demand remains strong, and the taiwan stock market is expected to consolidate before potentially reaching new highs [2]. a public bank executive noted that the taiwan stock market is expected to experience range-bound trading, with strong support around 23,000 points and the 22,813-point quarterly line [2]. investment strategies should focus on fundamentals, particularly in ai servers, semiconductors, and related supply chains [2].

u.s. strategy and tsmc’s role

the economist suggests that the u.s. should focus on supporting tsmc and other allied chipmakers rather than subsidizing struggling intel [8]. it emphasizes the importance of taiwan’s security for the semiconductor supply chain [8]. while tsmc’s third arizona fab is expected to produce 2nm chips by the late 2020s, a significant portion of 2nm chip production will likely remain in taiwan [8]. the economist notes that tsmc’s model relies on innovation in taiwan before global expansion [8].

Bronnen

geopolitical risk tsmc resources