TSMC stock declines as market faces broad weakness
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 18 2024
0mins
Should l Buy TSM?
Taiwan Semiconductor Manufacturing Co Ltd (TSMC) shares fell 5% as the stock crossed below its 5-day SMA, reflecting a challenging market environment.
The decline comes amid a broader market downturn, with the Nasdaq-100 down 1.47% and the S&P 500 down 0.75%. This suggests a sector rotation, as TSMC's strong fundamentals and growth potential remain intact despite the market's overall weakness. Investors are still optimistic about TSMC's future, particularly with its expected compound annual growth rate of 25% from 2024 to 2029 in the AI market.
The current price movement indicates that while TSMC is facing short-term pressure, its long-term growth prospects remain strong, driven by increasing demand for semiconductors and advancements in technology.
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Analyst Views on TSM
Wall Street analysts forecast TSM stock price to fall
8 Analyst Rating
7 Buy
1 Hold
0 Sell
Strong Buy
Current: 401.610
Low
63.24
Averages
313.46
High
390.00
Current: 401.610
Low
63.24
Averages
313.46
High
390.00
About TSM
Taiwan Semiconductor Manufacturing Co Ltd is a Taiwan-based integrated circuit foundry service provider. The Company is primarily engaged in integrated circuit manufacturing services. It offers advanced process technologies, specialised process solutions, advanced photomask and silicon stacking, and packaging-related technologies, while supporting a comprehensive design ecosystem. The Company's products serve diverse electronic sectors including artificial intelligence, high-performance computing, wired and wireless communications, automotive and industrial equipment, personal computing, information applications, consumer electronics, smart internet of things, and wearable devices.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
TSMC's Opportunities and Risks in AI Infrastructure
- Strong Market Performance: TSMC's stock has surged approximately 140% over the past year and 30% year-to-date, indicating robust performance in the semiconductor sector and attracting investor interest.
- Capital Expenditure Plans: The company plans to invest between $52 billion and $56 billion in 2023 for capital expenditures to build more fabs and increase capacity, reflecting confidence in future demand but also increasing reliance on AI infrastructure spending.
- Competition and Risks: While TSMC holds a monopoly in advanced logic chip manufacturing, competitors like Samsung and Intel are ramping up investments, particularly in advanced packaging and new technologies, which could threaten TSMC's market position.
- Geopolitical Challenges: With most of TSMC's fabs located in Taiwan, the company faces geopolitical risks, and although it is expanding into the U.S., the lower margins of new fabs could impact overall profitability.
See More
Global Semiconductor Sales Surge 79% Year-Over-Year
- Sales Surge: According to the World Semiconductor Trade Statistics organization, global semiconductor sales reached $99.5 billion in March 2026, representing a remarkable 79% year-over-year increase, indicating robust market demand, particularly benefiting major manufacturers like Taiwan Semiconductor Manufacturing (TSM).
- Quarterly Performance: Sales in the first quarter of 2026 increased by 25% year-over-year to $298.5 billion, showcasing a strong recovery in the semiconductor industry and further solidifying TSM's leadership in global chip manufacturing capacity.
- Optimistic Market Outlook: Semiconductor Industry Association CEO John Neuffer stated that if sales continue at this pace, global semiconductor sales could exceed $1 trillion in 2026, shattering the previous record of $791.7 billion set in 2025, reflecting widespread market demand.
- Significant Regional Growth: In March 2026, semiconductor sales surged by 108% year-over-year in the Asia Pacific, 83% in the Americas, 75% in China, 46% in Europe, and 7% in Japan, indicating a strong recovery and diversified demand across global markets.
See More
VanEck Semiconductor ETF Rallies 32.2% in April
- Market Rebound: Following a tentative ceasefire in Iran, the VanEck Semiconductor ETF (SMH) surged 32.2% in April, reflecting strong market confidence in the semiconductor sector, particularly amid soaring AI demand.
- TSMC's Strong Performance: Taiwan Semiconductor Manufacturing Company (TSMC) reported a 40.6% revenue increase and a 58.3% net income rise in Q1, with expectations of over 30% growth for the year, setting a solid foundation for the semiconductor industry's recovery.
- Equipment Suppliers Excel: Key equipment suppliers like ASML and Lam Research also exceeded analyst expectations in Q1, showcasing a bullish outlook for the coming years, which further propelled the semiconductor sector's growth.
- Intel's Profit Surge: Intel's earnings report on April 23 significantly surpassed expectations, leading to a 114.1% stock price increase in a month, indicating a rapid rise in demand for traditional data center CPUs, potentially driving external chipmakers to utilize its foundry services.
See More
Semiconductor Sector Optimism Amid Strong Earnings Reports
- Significant Revenue Growth: Taiwan Semiconductor Manufacturing Company (TSMC) reported a 40.6% revenue increase and a 58.3% net income rise in Q1, exceeding market expectations and reinforcing its leadership position in the global semiconductor market.
- Increased Capital Expenditures: TSMC anticipates capital expenditures at the high end of $52 billion to $56 billion for 2023, indicating strong confidence in future growth, which could drive performance improvements for related equipment suppliers.
- Intel's Earnings Rebound: Intel's earnings report on April 23 surpassed analyst expectations, leading to a 114.1% stock price surge in a month, reflecting a surge in demand for traditional data center CPUs, which may enhance its profitability.
- Overall Industry Optimism: With the rise of generative AI, semiconductor demand is significantly outpacing supply, and earnings across the sector are expected to continue growing over the next two years, although investors should remain cautious of potential market risks.
See More
Pinterest Surges on Record User Growth and Positive Revenue Guidance
- Strong User Growth: Pinterest (PINS) surged over 15% ahead of market open, driven by an 11% year-over-year increase in monthly active users (MAU), marking the tenth consecutive quarter of double-digit growth, indicating that enhanced user engagement will support future profitability.
- Optimistic Revenue Guidance: Pinterest's revenue guidance exceeded expectations, with CEO Bill Ready emphasizing the company's commitment to aligning profitability with user engagement, thereby boosting investor confidence and driving stock price increases.
- Positive Market Reaction: Analyst Rich Greifner highlighted that Pinterest's large and engaged user base, characterized by high commercial intent, makes it an attractive platform for advertisers, further solidifying its competitive position in the advertising market.
- Favorable Industry Outlook: As Pinterest's user growth and revenue expectations improve, market confidence in its future performance is likely to attract more investor interest, propelling further development in the social media sector.
See More
Apple in Talks with Intel and Samsung for Chip Production
- Diverse Supplier Strategy: Apple is in preliminary talks with Intel and Samsung to consider adding chip suppliers to reduce reliance on TSMC, thereby mitigating supply chain risks and ensuring product stability.
- Intel Stock Surge: Following news of Apple's discussions, Intel's stock rose nearly 3% in pre-market trading, indicating optimistic market expectations for its chip manufacturing services, which could drive a business revival.
- Chip Shortage Impact: During its earnings call, Apple acknowledged that chip shortages were limiting growth for iPhone and Mac, with CEO Tim Cook noting that current supply chain flexibility is below normal levels, reflecting strong demand for high-performance chips.
- Intel Restructuring Progress: Under its new CEO, Intel is undergoing significant reorganization aimed at reviving its foundry business, with recent partnerships and surging AI data center demand providing momentum for future growth.
See More
TSMC's Opportunities and Risks in AI Infrastructure
- Strong Market Performance: TSMC's stock has surged approximately 140% over the past year and 30% year-to-date, indicating robust performance in the semiconductor sector and attracting investor interest.
- Capital Expenditure Plans: The company plans to invest between $52 billion and $56 billion in 2023 for capital expenditures to build more fabs and increase capacity, reflecting confidence in future demand but also increasing reliance on AI infrastructure spending.
- Competition and Risks: While TSMC holds a monopoly in advanced logic chip manufacturing, competitors like Samsung and Intel are ramping up investments, particularly in advanced packaging and new technologies, which could threaten TSMC's market position.
- Geopolitical Challenges: With most of TSMC's fabs located in Taiwan, the company faces geopolitical risks, and although it is expanding into the U.S., the lower margins of new fabs could impact overall profitability.
See More
Global Semiconductor Sales Surge 79% Year-Over-Year
- Sales Surge: According to the World Semiconductor Trade Statistics organization, global semiconductor sales reached $99.5 billion in March 2026, representing a remarkable 79% year-over-year increase, indicating robust market demand, particularly benefiting major manufacturers like Taiwan Semiconductor Manufacturing (TSM).
- Quarterly Performance: Sales in the first quarter of 2026 increased by 25% year-over-year to $298.5 billion, showcasing a strong recovery in the semiconductor industry and further solidifying TSM's leadership in global chip manufacturing capacity.
- Optimistic Market Outlook: Semiconductor Industry Association CEO John Neuffer stated that if sales continue at this pace, global semiconductor sales could exceed $1 trillion in 2026, shattering the previous record of $791.7 billion set in 2025, reflecting widespread market demand.
- Significant Regional Growth: In March 2026, semiconductor sales surged by 108% year-over-year in the Asia Pacific, 83% in the Americas, 75% in China, 46% in Europe, and 7% in Japan, indicating a strong recovery and diversified demand across global markets.
See More
VanEck Semiconductor ETF Rallies 32.2% in April
- Market Rebound: Following a tentative ceasefire in Iran, the VanEck Semiconductor ETF (SMH) surged 32.2% in April, reflecting strong market confidence in the semiconductor sector, particularly amid soaring AI demand.
- TSMC's Strong Performance: Taiwan Semiconductor Manufacturing Company (TSMC) reported a 40.6% revenue increase and a 58.3% net income rise in Q1, with expectations of over 30% growth for the year, setting a solid foundation for the semiconductor industry's recovery.
- Equipment Suppliers Excel: Key equipment suppliers like ASML and Lam Research also exceeded analyst expectations in Q1, showcasing a bullish outlook for the coming years, which further propelled the semiconductor sector's growth.
- Intel's Profit Surge: Intel's earnings report on April 23 significantly surpassed expectations, leading to a 114.1% stock price increase in a month, indicating a rapid rise in demand for traditional data center CPUs, potentially driving external chipmakers to utilize its foundry services.
See More
Semiconductor Sector Optimism Amid Strong Earnings Reports
- Significant Revenue Growth: Taiwan Semiconductor Manufacturing Company (TSMC) reported a 40.6% revenue increase and a 58.3% net income rise in Q1, exceeding market expectations and reinforcing its leadership position in the global semiconductor market.
- Increased Capital Expenditures: TSMC anticipates capital expenditures at the high end of $52 billion to $56 billion for 2023, indicating strong confidence in future growth, which could drive performance improvements for related equipment suppliers.
- Intel's Earnings Rebound: Intel's earnings report on April 23 surpassed analyst expectations, leading to a 114.1% stock price surge in a month, reflecting a surge in demand for traditional data center CPUs, which may enhance its profitability.
- Overall Industry Optimism: With the rise of generative AI, semiconductor demand is significantly outpacing supply, and earnings across the sector are expected to continue growing over the next two years, although investors should remain cautious of potential market risks.
See More
Pinterest Surges on Record User Growth and Positive Revenue Guidance
- Strong User Growth: Pinterest (PINS) surged over 15% ahead of market open, driven by an 11% year-over-year increase in monthly active users (MAU), marking the tenth consecutive quarter of double-digit growth, indicating that enhanced user engagement will support future profitability.
- Optimistic Revenue Guidance: Pinterest's revenue guidance exceeded expectations, with CEO Bill Ready emphasizing the company's commitment to aligning profitability with user engagement, thereby boosting investor confidence and driving stock price increases.
- Positive Market Reaction: Analyst Rich Greifner highlighted that Pinterest's large and engaged user base, characterized by high commercial intent, makes it an attractive platform for advertisers, further solidifying its competitive position in the advertising market.
- Favorable Industry Outlook: As Pinterest's user growth and revenue expectations improve, market confidence in its future performance is likely to attract more investor interest, propelling further development in the social media sector.
See More
Apple in Talks with Intel and Samsung for Chip Production
- Diverse Supplier Strategy: Apple is in preliminary talks with Intel and Samsung to consider adding chip suppliers to reduce reliance on TSMC, thereby mitigating supply chain risks and ensuring product stability.
- Intel Stock Surge: Following news of Apple's discussions, Intel's stock rose nearly 3% in pre-market trading, indicating optimistic market expectations for its chip manufacturing services, which could drive a business revival.
- Chip Shortage Impact: During its earnings call, Apple acknowledged that chip shortages were limiting growth for iPhone and Mac, with CEO Tim Cook noting that current supply chain flexibility is below normal levels, reflecting strong demand for high-performance chips.
- Intel Restructuring Progress: Under its new CEO, Intel is undergoing significant reorganization aimed at reviving its foundry business, with recent partnerships and surging AI data center demand providing momentum for future growth.
See More
