TSMC Shares Slump After DeepSeek Shock

Taiwan Semiconductor Manufacturing Co. (TSMC) shares suffered their biggest drop in nearly six months as trading resumed Monday, catching up to last week’s global selloff in artificial intelligence-linked stocks, Winnie Hsu and Charlotte Yang reported for Reuters.

TSMC's declines came after investors were blindsided by news that DeepSeek’s AI model could rival leading U.S. developers. I Photo: 曾 成訓 Wikimedia Commons

Taipei-listed TSMC shares slid as much as 6.6%, dragging down the benchmark Taiex index by as much as 4.4%. Hon Hai Precision Industry Co. fell 9.2%.

The declines came after investors were blindsided by news that DeepSeek’s AI model could rival leading U.S. developers, triggering a rout in chip stocks while Taiwan’s market was closed for the Lunar New Year holiday.

“TSMC share prices are simply reflecting the movement of its ADRs,” said Ken Wong, an Asian equity portfolio specialist at Eastspring Investments. “We’re currently reassessing our positions in companies with production exposure in Mexico, as they’ll be among the first to feel the impact.”

Hon Hai, which last year announced plans to build the world’s largest assembly site for servers powered by Nvidia’s GB200 chips in Mexico, was among the hardest hit. Other Taiwanese firms with ties to Nvidia, such as Inventec Corp., also saw sharp declines, with Inventec’s shares dropping as much as 8.5% on Monday.