Despite a stream of fundamentally positive developments, shares in Taiwan Semiconductor Manufacturing Company (TSMC) closed sharply lower on Friday. The sell-off appears to be a classic case of profit-taking following a strong rally, with the long-term investment thesis for the chipmaking leader remaining firmly intact.
Operational Strength and Strategic Shifts
The company’s recent operational performance provides a solid foundation for its ambitions. In November, TSMC reported a year-on-year revenue increase of 24.5%. Strategically, the firm is adapting to capitalize on the artificial intelligence boom. Recent reports indicate plans to upgrade its Japanese production facilities to manufacture more advanced 4-nanometer chips, specifically to meet soaring demand for AI hardware.
A Staggering Scale-Up in U.S. Investment
The most significant news emerged from Washington as the week drew to a close. U.S. Commerce Secretary Howard Lutnick suggested TSMC could potentially expand its investment in the United States to over $200 billion. This figure represents a dramatic increase from the previously estimated $65 billion. The revised roadmap is understood to include three additional fabrication plants, advanced packaging facilities, and new research centers.
Should investors sell immediately? Or is it worth buying TSMC?
Market Reaction and Analyst Perspective
On Friday, TSMC’s stock price fell by 4.23%, closing at 249.00 euros. Market observers largely interpret this decline as a technical correction near all-time highs rather than a reflection of deteriorating fundamentals.
Analyst sentiment remains bullish. Bernstein reaffirmed its positive outlook, anticipating that the company’s fourth-quarter results will surpass its own guidance. Bank of America also maintained its optimism, pointing to sustained strength in TSMC’s high-performance computing segment. The overarching upward trend for the year remains robust, with the stock still showing a gain of more than 26% since the start of the year.
Upcoming Catalyst for Investors
The next critical milestone for investors is scheduled for January 15, 2026, when TSMC will release its complete fourth-quarter financial report. This disclosure is expected to do more than confirm whether the optimistic revenue forecasts have been met; it will likely also provide the first official details regarding the massive U.S. investment plan.
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