Taipei, July 24, 2026 – Taiwan Semiconductor Manufacturing Co (TSMC) experienced a notable downturn on Friday, closing at NT$2,350, a decline of 2.29%. This drop occurred as the broader TAIEX index fell 2.67% to 43,654.84, reflecting a broad market sell-off in Asian equities.
The decline in TSMC's local shares highlighted a growing divergence with its American Depositary Shares (ADS) traded on the New York Stock Exchange. Thursday's close for the ADS at $415.58 implied a value of approximately NT$2,689 per local share, resulting in a provisional cross-market discount of 14.4%. This gap is based on the U.S. close from Thursday and the Taiwan close from Friday, as the two markets operate on different trading schedules.
Despite the Friday pullback, TSMC posted a weekly gain of 2.62%, outperforming the TAIEX's 2.30% advance for the same period. The company's relative resilience underscores its strong fundamentals, even as the broader market grapples with headwinds.
The disparity between the two markets presents a critical test for the coming week. New York could slide closer to Taipei, or Taipei could recover on Monday. The U.S. market's close on Friday will set a new basis for comparison, and when trading resumes in Taiwan, it will reveal whether the gap persists or narrows.
Trading activity among local investors on Friday was within a normal range, with 24.6 million shares changing hands, representing 64% of the 65-day average volume. This suggests that the decline was not driven by panic selling but rather a broader market sentiment shift.
The broader market decline was attributed to rising oil prices, climbing bond yields, and growing uncertainty over artificial intelligence (AI) investment. These factors reduced risk appetite across Asian markets. Shaniel Ramjee at Pictet Asset Management noted that U.S. megacaps are engaging in more capital expenditure, making the sector more sensitive to interest rate changes.
Key cloud clients, including Microsoft (MSFT) and Meta Platforms (META), are set to release results on July 29, followed by Amazon.com (AMZN) on July 30. These earnings will provide crucial updates on demand for cloud services and AI-related investments.
The Federal Reserve is scheduled to meet on July 28-29, and futures markets on Friday assigned about a one-in-three probability to a rate hike. An increase in rates could weigh on long-duration growth stocks, including TSMC.
Analysts have raised their forecasts for TSMC amid expanding profit margins. According to FactSet Research Systems, the early estimate for 2027 ADS earnings stands at $21.47, up 10.7% from three months earlier. On Thursday, the ADS traded at 19.4 times that projected figure.
TSMC reported a second-quarter gross margin of 67.7% and projected third-quarter revenue in the range of $44.6 billion to $45.8 billion. Chairman and CEO C.C. Wei emphasized that pricing is tied to the survival and growth of customers, stating, "We earn our value," and noting that margins need to sustain long-term capacity.
