Why Key Apple, Nvidia Supplier TSMC's Shares Are Plunging In Wednesday's Premarket – Benzinga
Shares of foundry Taiwan Semiconductor Manufacturing Company Limited TSM fell sharply in premarket trading on Wednesday, with the weakness likely due to Republican nominee Donald Trump’s comments regarding the China-Taiwan standoff in an interview with Bloomberg.
Trump said Taiwan took about “100% of our chip business,” referring to the outsourcing of manufacturing by U.S. tech companies to Taiwan-based suppliers. They took almost 100% of our chip industry, I give them credit. That's because stupid people were running the country,” he said.
“Now we're giving them billions of dollars to build new chips in our country, and then they're going to take that too, in other words, they'll build it but then they'll bring it back to their country,” he added.
Taiwan-based TSMC is a foundry that manufactures general-purpose and custom-made chips and supplies them to tech companies worldwide, including Nvidia Corp. NVDA, Apple, Inc. AAPL and Advanced Micro Devices, Inc. AMD.
Trump also said Taiwan should pay the U.S. for defense, as it defends itself against China, which considers the island nation to be an integral part of the mainland.
Sentiment toward the stock also took a hit from a lukewarm forecast issued by Dutch chip equipment maker ASML Holding N.V. ASML.
In premarket, the stock fell 5.26% to $176.25, according to Benzinga Pro data. Only recently, the company’s U.S.-listed ADR surged up, helping the company cross the $1 trillion market-cap threshold.
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