tsmc hit hard: adr dives amid tariff war fears
New York, Monday, 7 April 2025.
tsmc’s american depositary receipts plummeted nearly 14% due to escalating us-initiated tariff war anxieties. This drop reflects investor concerns about potential manufacturing cost increases and reduced demand. The broader market felt the impact, with approximately $6 trillion evaporating from us stock values after the tariff announcements. Experts are now predicting a potential further downturn, with some suggesting tsmc could face a significant correction.
tariff war escalates market concerns
President Trump’s imposition of tariffs, ranging from 17% to 49% on individual countries, triggered a sell-off in the us stock market [1]. The S&P 500 fell by 5.97%, the Dow Jones Industrial Average plummeted by 5.50%, and the Nasdaq dropped by 5.82%, officially entering a bear market [1]. These declines mark the largest single-day drops since March and June 2020, respectively [1]. The technology sector was particularly hard-hit, exacerbating concerns about tsmc’s prospects [3].
analysts foresee potential tsmc downturn
The sharp decline in tsmc’s adr has prompted analysts to consider the potential for further losses [1]. Some experts suggest that tsmc’s stock price could test lower levels, with concerns arising from the potential impact of tariffs on the company’s profitability [1][2]. Market sentiment is further weighed down by the possibility of tsmc’s stock potentially dropping to around $800 if a joint venture with Intel requires consolidated financial reporting, which could reduce long-term profit margins [2]. However, without the joint venture, a fairer stock price could be $1388 [2].
joint venture impact and strategic shifts
A proposed joint venture between tsmc and intel to operate intel’s us-based wafer fabs adds another layer of uncertainty [2]. Under the preliminary agreement, tsmc would provide technology in exchange for a 20% stake in the joint venture [2]. This move is viewed by some as a politically driven decision, potentially leading to a ‘de-Taiwanization’ of the supply chain as us companies seek to reduce reliance on taiwanese manufacturing [7]. An internal intel memo suggests that about 15% of its engineers may transfer to the joint venture [7].
market volatility and investor reactions
The market’s reaction to the tariff news and tsmc’s situation has been intense. The volatility index (vix) has surged to nearly 51%, a level not seen since March 2020, indicating extreme market fear [3]. Investors are seeking safety in bonds, driving down the yield on 10-year us treasury notes below 4% [3]. Financial professionals are bracing for significant market movements, with taiwanese securities firms preparing for potential heavy trading volumes and substantial declines on the taiwan stock exchange [6]. Premier Cho Rong-tai has advised citizens to prepare for market shocks [6].