tsmc shares slide amid investor jitters over potential us subsidy deal

2025-08-21 tsmc

Taipei, Thursday, 21 August 2025.
tsmc’s stock took a hit on the taiwan stock market, plummeting by almost 3%. Major institutional investors offloaded shares worth billions of new taiwan dollars. This sell-off was triggered by concerns that us government subsidies might come with an unwelcome string attached, equity stake. This situation underscores how sensitive semiconductor companies are to geopolitical undercurrents.

Taiwan stock market reacts

On August 20, 2025, the Taiwan stock market experienced a significant downturn, closing at 23,625.44 points, a decrease of 728.06 points, or 2.99% [1]. This drop was influenced by concerns that TSMC might be compelled to cede equity to the U.S. government in exchange for subsidies under the ‘Chips Act’ [3]. The market-wide sell-off saw three major institutional investors offload a total of NT$68.02 billion worth of shares [1]. TSMC’s stock specifically closed at NT$1135, a decrease of NT$50 or 4.22%, which resulted in a market capitalization decrease of NT$30 trillion [1].

institutional investor activity

Three major institutional investors sold 27,948 shares of TSMC, totaling NT$32.1 billion [1]. This activity contributed to a broader trend where foreign investors have sold a total of NT$83.776 billion in the last three days and NT$35.983 billion in August [1]. The top five stocks sold by institutional investors on August 20 were TSMC, Yongfeng Financial Holding (26,706 shares), Quanta (13,938 shares), HTC (13,283 shares), and Pou Chen (11,646 shares) [1]. HTC also experienced a 3.70% drop, closing at NT$54.6 [1].

government intervention and market sentiment

Amid the TSMC stock decline, eight major government-owned stocks purchased over 2,000 TSMC shares for NT$2.401 billion [3]. Despite this, foreign investors sold 32,000 TSMC shares on the same day [3]. According to Moore Securities CEO Guo Zhe-Rong, the market’s behavior reflected a ‘day trading trend,’ influenced by technical settlement factors rather than a fundamental market reversal [3]. Li Yongnian, Vice President of Kai-Fa Investment Consulting, noted that market confidence has not fully recovered [4].

us government policy and tsmc’s position

U.S. Secretary of Commerce Howard Lutnick stated that the U.S. government might become Intel’s largest shareholder, confirming a 10% stake [5]. Lutnick also emphasized that AI chip manufacturing should not rely heavily on Taiwan [5]. He argued that concentrating 99% of advanced chip production in Taiwan is not feasible due to geopolitical risks [5]. Lutnick suggested using funds from the ‘Chips Act’ to acquire equity in companies like Intel, rather than providing subsidies without returns for American taxpayers [5].

analyst perspectives and future outlook

An analyst at Global Securities suggested the market is reacting to a potentially more level playing field, which could diminish TSMC’s competitive edge [3]. Wei Mingyu, an analyst at Ruiyuan Investment Consulting, remains optimistic about TSMC’s long-term prospects and maintains a target price of NT$1300 to NT$1400 [4]. TSMC’s plans include mass production of its 2-nanometer process in Q4 2025 and the A14 process in 2028 [4]. On August 21, TSMC’s Taipei shares opened higher, reaching NT$1150 intraday, an increase of NT$15 or 1.32% [4].

Bronnen

stock sell-off government subsidies