tsmc's dip: ai competition or buying opportunity?

2025-04-08 tsmc

taipei, Tuesday, 8 April 2025.
taiwan semiconductor manufacturing (tsmc) experienced a 6.72% stock drop. this decline is attributed to rising competition from chinese ai firms and tariff concerns. however, analysts believe this dip presents a potential buying opportunity, given tsmc’s dominance in advanced chip manufacturing. the company’s high-performance computing segment, fueled by ai demand, saw a 58% growth last year. tsmc also plans a substantial $100 billion investment in the us, further solidifying its market position. amidst market fluctuations, is this a temporary setback or a strategic entry point for investors?

tariff impacts and market reactions

The recent stock plunge occurred amidst president trump’s new tariff announcements on europe and china in march [1]. effective april 9, 2025, china faces a 54% tariff on goods [1]. china has retaliated with 34% tariffs on us goods, specifically naming tsmc [1]. despite this, trump identified tsmc as a firm that would avoid us tariffs [1]. these tariff developments significantly influence tsmc’s stock performance [1]. broader market reactions include significant drops in australian, new zealand, korean, and singaporean stock markets due to tariff-related investor concerns [4].

financial metrics and analyst perspectives

Tsmc’s twelve-month trading price is $247.07 [1]. the company’s high-performance computing segment, which includes ai chips, accounted for 51% of its total revenue of $90.1 billion in 2024 [1]. tsmc anticipates a mid-40% compound annual growth rate for ai accelerator revenue in coming years [1]. for q4 2024, tsmc reported $26.73 billion in revenue and earnings per share of $0.02 [1]. despite a 200% rise over the past five years, tsmc’s stock has pulled back 25% year-to-date [1]. analysts suggest the current dip is a buying opportunity, citing tsmc’s dominant 90% control of advanced chip production [1].

broader market turmoil and wealth impact

Taiwan’s stock market experienced a significant downturn, with the taiwan stock exchange weighted index falling 9.8% [4]. this triggered a circuit breaker on the taiwan stock exchange [3][6][7]. tsmc and foxconn shares both neared a 10% decline, exacerbating the market’s woes [3][6][7]. the decline in tsmc’s stock price has had a notable impact on the wealth of its key stakeholders [5]. tsmc founder chang chung-mou’s net worth decreased by over 11.7 billion yuan due to the stock’s performance [5].

Bronnen

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