What Is Going On With Taiwan Semiconductor Stock On Tuesday?

Taiwan Semiconductor Manufacturing Co TSM stock is trading lower Tuesday as Chinese chip firms anxiously await updates from Taiwan Semiconductor, concerned about expanded bans impacting key industries like smartphones and autonomous vehicles, SCMP reports.

TrendForce analysts told the SCMP that Taiwan Semiconductor will likely implement broader curbs on advanced AI chip shipments to mainland China following U.S. export restrictions.

TrendForce noted Taiwan Semiconductor’s ongoing evaluation of client vetting and product reviews, suggesting potential near-term restrictions beyond AI chips, possibly affecting CPUs and automotive chips.

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Taiwan Semiconductor stock is trading lower on Tuesday.

Morningstar analyst Phelix Lee highlighted concerns to SCMP that Taiwan Semiconductor’s expanded curbs could severely impact mainland China’s chip design sector as local foundries like Semiconductor Manufacturing International Corporation (SMIC) struggle to meet demand for advanced nodes. He noted that SMIC’s capacity remains limited due to U.S. export controls on crucial tools.

Mainland China accounted for 11% of Taiwan Semiconductor’s third-quarter revenue, per Visible Alpha by S&P Global Market Intelligence data.

On Tuesday, the Taiwan Semiconductor Board approved capital expenditures of approximately $15.5 billion for fab construction, installation of fab facility systems, installation of advanced technology capacity, and 2025 R&D capital investments.

The board also approved the sale of unsecured corporate bonds in multiple offerings in the domestic market, totaling up to 60 billion New Taiwan Dollars.

Last week’s reports indicated that Taiwan Semiconductor’s U.S. investment strategy remains intact despite Donald Trump’s presidential win and his constant digs at Taiwan. The contract chip maker’s $65 billion Arizona expansion remains on track.

Taiwan Semiconductor stock gained over 89% year-to-date.

Is Taiwan Semi Stock A Good Buy?

An investor or trader's decision to buy or sell a stock is unique to their time horizon and risk tolerance. Many typical investors evaluate earnings growth and valuation on a particular stock before making a decision.

For example, for Taiwan Semiconductor, you'll notice that earnings in its last quarter grew 7.78% source. As an investor, you'll want to decide whether that's better or worse than what you'd like to see among stocks in your portfolio.

On the valuation side, Taiwan Semiconductor's price to earnings ratio – a measure of how much an investor pays for the company's earnings – is grown 84.46% in the current quarter when compared with last year. That places it below similar businesses NVIDIA, Broadcom, Advanced Micro Devices in its sector. You'll need to decide whether that makes it more or less attractive based on how you think the company will perform over time.

There are many different valuation metrics that may help you make a decision. Find more on Taiwan Semiconductor's quote page, or if you'd like a deeper dive in an advanced program, try Benzinga PRO for free.

Price Actions: TSM stock is down 1.95% at $190.28 at the last check on Tuesday.

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