Why Taiwan Semiconductor Manufacturing Company Shares Are Volatile This Week

Taiwan Semiconductor Mfg. Co. Ltd. TSM shares are trading off session highs early Friday and down some 4% for the week. The stock has seen marked volatility in recent sessions amid the announcement of Taiwan’s sweeping economic and social reforms. This policy introduces uncertainty and energy security concerns, critical for TSMC’s operations.

Additionally, geopolitical tensions, highlighted by former President Trump’s comments on Taiwan’s defense payments, could increase market volatility. These factors, combined with potential shifts in investment focus from semiconductor stocks, have contributed to the stock’s instability in July.

Recent news out of Taiwan highlights potential energy security issues, with many power plants scheduled to shut down and the last reactor at Taiwan's Third Nuclear Power Plant set for retirement next year. Reliable energy is crucial for semiconductor manufacturing, which is highly energy-intensive. Any disruptions or uncertainties in energy supply could affect TSMC’s operations and profitability.

Additionally, the mention of former President Donald Trump’s comment about Taiwan paying for defense can heighten geopolitical tensions. Increased geopolitical risks can lead to market volatility as investors reassess the stability and security of their investments in Taiwan.

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How To Buy TSM Stock

Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.

For example, in Taiwan Semiconductor’s case, it is in the Information Technology sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.

According to data from Benzinga Pro, TSM has a 52-week high of $193.47 and a 52-week low of $84.02.