tsmc weathers taiwan market storm: is this a buying opportunity?

tsmc weathers taiwan market storm: is this a buying opportunity?

2025-04-08 tsmc

Taipei, Tuesday, 8 April 2025.
tsmc’s stock experienced a dip amidst a broader downturn in the taiwan stock market. the yuanta taiwan top 50 etf, heavily weighted with tsmc, mirrored this volatility. on april 7, the taiwan stock market saw its largest single-day drop in history, plummeting 2,065 points. tsmc shares also took a hit, dropping 94 new taiwan dollars, or almost 10%, reaching the daily limit. will tsmc recover, or is this the beginning of a larger collapse?

tariff shockwaves hit taiwanese equities

The catalyst for this market upheaval is U.S. President Trump’s imposition of reciprocal tariffs, a move that triggered a global stock market crash [2]. The taiwan stock market, reopening after the qingming holiday, faced immediate selling pressure [3]. The central market index plummeted by 2,065.87 points, settling at 19,232.35 [3]. This erased the previous record set on august 5 of the prior year [3]. The steep decline reflects investor anxiety and a rush to adjust portfolios in response to the changed trade landscape [4].

tsmc’s pivotal role and market impact

As a bellwether for the taiwanese economy, tsmc’s performance significantly influences the broader market sentiment [3]. Tsmc constitutes a substantial 35.5% of the taiwan stock market’s total value [3]. The company’s stock experienced a rare event, a limit-down opening, a phenomenon unseen in over 16 years [3]. Tsmc’s steep drop of 94 new taiwan dollars translated to a 756.8-point drag on the taiex [3]. The impact underscores tsmc’s critical role in the taiwanese economy and stock market [1][3].

expert opinions and market stabilization measures

Cathay securities investment trust chairman chang hsi characterizes the situation as a ‘man-made bear market’ resulting from trump’s unexpected tariff policies [3]. He likens the market’s panic to the onset of the covid-19 pandemic in 2020, advising investors to avoid panic selling [3]. The executive yuan has announced an 88 billion new taiwan dollar assistance package for affected industries [2]. The national security fund is considering further measures, including a temporary committee to address economic and political responses [2].

Amidst the widespread downturn, certain sectors demonstrated relative resilience [3]. Telecommunications stocks such as chunghwa telecom experienced comparatively smaller losses around 4.6% [3]. Domestic-oriented industries like convenience store chains also showed resistance to the overall market trend [3]. Investors are advised to consider balanced asset allocation strategies, avoiding leveraged positions during this period of volatility [3]. Some analysts suggest focusing on fundamentally sound investments and dividend-paying stocks [3].

long-term perspective versus short-term volatility

Despite the current turmoil, some experts maintain a positive long-term outlook on taiwan’s economy, particularly its crucial role in the ai supply chain [3]. Chang hsi points to strong ai demand and increased capital expenditure from cloud service providers as positive factors [3]. He suggests viewing the present situation as another ‘trump pandemic,’ with the expectation that investment will eventually revert to fundamental strengths [3]. However, short-term volatility is expected to persist, requiring investors to remain vigilant [2][3].

national security fund intervention and market outlook

In response to the escalating market decline, the national security fund has decided to implement its ninth market stabilization mission, backed by 500 billion new taiwan dollars [7]. The fund’s intervention aims to restore investor confidence and prevent further market deterioration [7]. However, some market participants remain cautious, with differing opinions on whether it’s the right time to buy [7]. The market’s reaction to the national security fund’s actions will be critical in determining the near-term trajectory of tsmc’s stock and the broader taiwanese market [2][7].

Bronnen


stock market financial performance