NEW YORK, April 28, 2026, 15:30 (EDT)
- TSM’s U.S.-listed depositary receipts slipped roughly 3% in afternoon trading, part of a broader downturn among chip stocks.
- Investors started to scrutinize AI-related expenditures, just before a wave of earnings reports from some of the top U.S. tech names.
- A court decision in Taiwan regarding a TSMC trade-secrets case put the spotlight back on the chipmaker’s edge in technology. Still, the real driver behind Tuesday’s move in the stock was the broader AI pullback.
TSM’s U.S.-listed depositary receipts slipped 2.9% to $393.07 Tuesday afternoon, dragged down as chip stocks pulled back on renewed questions about AI spending. Shares of the iShares Semiconductor ETF lost 3.1%. ASML was off by 2.9%, and Nvidia—one of TSMC’s biggest customers—was also in the red.
This is important at the moment: Taiwan Semiconductor Manufacturing Co. is now a key stock-market stand-in for the AI build-out. The company manufactures advanced chips for firms designing processors and custom silicon inside data centers, so if AI capital spending stutters, TSM stock feels it almost immediately.
The latest dip wasn’t triggered by a TSMC earnings shortfall. Instead, Reuters noted that both the Nasdaq and S&P 500 edged down after fresh worries about the pace of AI growth dragged tech stocks lower. Chipmakers took a hit, following a Wall Street Journal story detailing OpenAI’s internal goals for users and revenue. Oliver Pursche, senior vice president at Wealthspire Advisors, told Reuters, “there’s lots of other players in the field,” and cautioned that it’s risky to read too much into results from a single company or incident. Reuters
Big Tech’s earnings are up next. This week, Alphabet, Amazon, Meta Platforms, Microsoft and Apple are all set to report—and according to Reuters, those five make up roughly 44% of the S&P 500’s value. TSMC investors are watching their spending plans closely, looking for signs that appetite for high-end compute hasn’t cooled.
TSMC is still seeing robust demand, judging by its latest figures. First-quarter revenue landed at $35.90 billion, a 40.6% jump from the previous year when measured in U.S. dollars. Net income came in at NT$572.48 billion. “Strong demand for our leading-edge process technologies” shored up the quarter, according to chief financial officer Wendell Huang.
TSMC put out second-quarter revenue guidance between $39.0 billion and $40.2 billion, aiming for a gross margin somewhere in the 65.5% to 67.5% range. That margin—what’s left once production costs are out—quickly shows any shift in factory loads or pricing strength, both crucial for chip manufacturers.
The company is working to clear logjams in advanced packaging—the process of connecting multiple chips into a single, high-powered unit. TSMC, according to an executive speaking with Reuters, is targeting a 2029 launch for a chip-packaging facility in Arizona. That’s meant to address a key supply limitation impacting Nvidia and other buyers of AI chips.
A Taiwan court slapped a T$150 million (roughly $5 million) fine on the local arm of Japan’s Tokyo Electron on Monday, handing down a 10-year sentence to Chen Li-ming—a former staffer from both TSMC and Tokyo Electron—over a trade secrets case. Authorities said the information involved TSMC’s 2-nanometer technology, the latest chipmaking process for more compact, power-saving semiconductors.
TSMC reiterated its strict stance against any breaches of trade-secret security. Tokyo Electron, for its part, said it “takes the court’s finding with the utmost seriousness,” adding that investigators found no evidence of organizational involvement or external leaks. The episode underlines that TSMC’s competitive strength isn’t just about scale—protecting proprietary expertise remains just as critical. Reuters
Competition is still fierce. Nvidia’s appetite for AI processors continues to power demand for TSMC’s cutting-edge nodes. ASML delivers the lithography equipment essential for top-tier chips. Tokyo Electron, meanwhile, finds itself under a brighter spotlight in the supply chain after the Taiwan ruling. It all adds up to TSMC sitting squarely at the intersection of the AI surge and its own operational hazards.
The downside is more visible now than it was a month back. A pullback in cloud spending, or if OpenAI-related jitters start to hit other AI buyers, TSMC might end up having to defend its capacity ramp. The company also flagged to investors that rising Middle East tensions could push up costs for certain gases and chemicals, possibly denting profitability—though it’s still too soon to put a number on that.
Tuesday’s decline comes off as a reset in the AI trade rather than any real shift in TSMC’s business fundamentals. The shares are caught in a tug-of-war — demand and margins still look solid, yet investors are waiting for convincing signs that end buyers of AI compute will keep up with TSMC’s ambitious buildout.
