Market Expects TSMC To Be Hammered After $72-B Rout

Taiwan Semiconductor Manufacturing Co.’s stock has lost more value than any other in Asia since mid-June as investors brace for prolonged weakness in the chip sector.

Shares of the world’s largest contract chipmaker jumped 60% between October last year and June thanks to the global frenzy over everything related to artificial intelligence (AI). I Photo: Peellden Wikimedia Commons

The rout may not be over, as Jeanny Yu reported for Bloomberg News.

Since its June high, Taiwan-based TSMC shares have fallen 11%, erasing $77 billion from its market cap due to worries about the macro environment and soft global consumer electronics demand.

A continued rise in the volatility skew in recent months as traders bid up bearish contracts is indicating a further drop in TSMC’s stock.

Shares of the world’s largest contract chipmaker jumped 60% between October last year and June thanks to the global frenzy over everything related to artificial intelligence (AI).

But traders have turned more wary about just how much that will contribute to the bottom line, especially without a pickup in the smartphone and personal-computer business.

Even high-end AI chip orders have slowed at a faster pace than expected. For JPMorgan Chase & Co., all this means a slower recovery for TSMC going into 2024, as analysts including Gokul Hariharan wrote in a recent note.

“With a murky macro outlook, we expect 1H 24 orders to remain sluggish,” Subrat Patnaik, Michael Msika, and David Watkins also reported for Bloomberg News.

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