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TSMC shares slide after pledging another $100 billion Arizona capex
The investment brings TSMC’s planned cumulative US spend to $265 billion, alongside more leading-edge packaging plants in Taiwan.
TSMC’s US-listed shares fell more than 2% after the company’s second-quarter earnings call, even as the chipmaker reported record results and raised guidance. Yahoo Finance said the selloff reflects Wall Street concerns that the AI buildout could be overinvested relative to future compute demand.
TSMC reported $40 billion in revenue, with net income of $22 billion, and added to its outlook for the rest of the year. The company also pledged an additional $100 billion for an Arizona-based chip fab, pushing its cumulative US investment commitment to $265 billion, described as the largest foreign direct investment in history by CEO C.C. Wei.
The broader market reaction extended beyond TSMC, with Yahoo Finance noting declines in Nvidia, Arm, Micron, Marvell, and SK Hynix, and a 4.2% drop in the Philadelphia Stock Exchange Semiconductor Index. It also cited LSEG Datastream figures showing the semiconductor sector is now just under 20% of the S&P 500 by weight, up from about 5% in 2022.
TSMC signaled it expects the AI investment cycle to remain intense, with CFO Wendell Huang saying capex in the next three years will be significantly higher than in the prior three years. The company also said it plans additional leading-edge chip packaging plants in its home country over the next few years.
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