TSMC Stock Drops in Taiwan as AI Capex Fears Rise, but U.S. ADRs Stay Firm

TSMC stock fell in Taiwan on December 15, 2025. The shares dropped 2.03% in Taipei during a wider tech pullback. The fall came after new worries about AI spending cuts. Big U.S. tech firms warned about higher AI costs. This raised fears of slower demand.

But TSMC’s U.S. ADRs stayed steady near $293. The calm U.S. trading showed a split view in global markets. Many investors still trust TSMC’s long‑term strength. The company remains a key supplier for advanced AI chips.

TSMC Stock Moves as Nvidia and China Shift AI Chip Demand

According to Reuters, Nvidia plans to raise output of its H200 AI chip. China demand came in stronger than expected. TSMC makes the chips on its 4nm line. More orders would mean more wafer demand for TSMC.

The U.S. also allowed limited H200 exports to China with a 25% fee. This kept supply open but added new cost pressure. China may also add new rules on purchases. This could slow shipments. These steps add risk for TSMC and its clients.

Demand is high, but supply is tight. Nvidia must compete with Google and others for TSMC capacity. This creates bottlenecks in advanced packaging. Reuters reported that Chinese approvals are still pending. That leaves part of the outlook unclear.

Strong Revenue Helps TSMC Offset Market Volatility

TSMC posted strong results for November. Revenue rose 24.5% from a year earlier. The company also reported a 32.8% jump for the first eleven months of 2025. These gains show steady demand for AI and high‑performance chips.

Taiwan exports also hit a record in November. Reuters noted a 56% jump from last year. Much of the growth came from AI‑linked tech. This helped keep the wider sector stable, even with market swings.

Wall Street still sees upside. Analysts keep a “Buy” view on TSMC. Price targets show room for gains of 17–20%. Many expect the company to grow even faster as new packaging plants come online. CoWoS capacity is set to rise toward late 2026. This is key for Nvidia’s future AI chip plans.

Why Investors Still Look to TSMC for Long‑Term Growth

Analysts point to TSMC’s lead in advanced nodes. The company holds most of the market for high‑end AI chip manufacturing. It also grows faster than many tech peers. These factors help support long‑term demand.

TSMC is also a major part of top emerging market funds. Its stock has lifted ETF gains this year. Strong AI growth and steady chip output make it a core holding for many investors. Market watchers say this will likely continue into 2026.

TSMC stock may face short-term pressure, but long-term demand for AI chips remains strong. Many investors see the company as a key winner in the global AI supply chain.

FYI (keeping you in the loop)-

Q1: Why did TSMC stock drop in Taiwan?

TSMC stock fell after new concerns about rising AI spending. Tech firms warned of higher costs. This pushed the wider Taiwan market lower.

Q2: Why did TSMC’s U.S. ADRs stay stable?

U.S. investors focused on long‑term demand. Many expect steady chip orders for AI and cloud growth. This kept the ADR price stable.

Q3: What role does Nvidia play in TSMC demand?

Nvidia plans to boost H200 chip production. TSMC makes these chips. Higher orders would support TSMC’s 4nm manufacturing.

Q4: How strong are TSMC’s recent earnings?

TSMC reported a 24.5% rise in November revenue. Year‑to‑date revenue rose 32.8%. This shows strong AI chip demand.

Q5: What risks could impact TSMC next?

China rules, U.S. export limits, and tight packaging supply may slow growth. AI spending cuts could also weigh on demand.