TSMC shares drop below 1000 yuan as US tariff fears spook investors
Hsinchu, Friday, 29 November 2024.
Taiwan Semiconductor Manufacturing Company, the world’s largest chip maker, saw its stock price fall below the crucial 1000 yuan threshold amid growing concerns over Trump’s potential tariff policies. The market reaction intensified after former TSMC chairman Liu Deyin warned that moving 2nm chip production to the US could result in losses of hundreds of billions of dollars. The stock decline reflects deeper anxieties about TSMC’s global expansion strategy and rising production costs. Despite these challenges, the company maintains its dominant position, controlling 62% of the global chip market. The situation highlights the delicate balance TSMC must strike between appeasing US interests and maintaining profitable operations.
impact of tariff policies on tsmc
The recent drop in TSMC’s stock price below 1000 yuan is a significant indicator of investor apprehension over the economic implications of new tariffs. The Trump administration’s proposed tariffs have generated uncertainty in the market, particularly for companies with substantial operations in the United States. TSMC, a pivotal player in the semiconductor industry, faces increased scrutiny as it navigates these geopolitical and economic challenges[1].
manufacturing capacity and cost concerns
Liu Deyin’s remarks about the financial drawbacks of relocating 2nm chip production to the United States have exacerbated concerns. He highlighted potential losses amounting to hundreds of billions of dollars, which could significantly impact TSMC’s financial health. This cautionary stance reflects the broader industry anxiety about the feasibility and financial implications of shifting advanced manufacturing processes overseas[2].
geopolitical risks and market leadership
TSMC’s dominance in the global chip market, with a 62% share, underscores its critical role in the tech supply chain. However, geopolitical tensions, such as potential conflicts involving Taiwan, pose risks to its operations. The semiconductor giant’s strategy to diversify its manufacturing locations, including new plants in the United States and Germany, reflects its efforts to mitigate these risks and maintain its market leadership[3].
market expert views
Market analysts remain cautiously optimistic about TSMC’s long-term prospects despite current challenges. The company’s robust position in the semiconductor industry and strategic investments in advanced technologies are seen as key assets. Nonetheless, the unpredictability of geopolitical factors and potential shifts in trade policies continue to influence investor sentiment and market expectations[4].