AI Spending Over Earnings: 3 Reasons TSMC Shares Slipped

On October 30, Taiwan’s TAIEX index closed down 2.49% at 45,211.83. During the session it slid as low as 44,726, more than 10% below its record close on October 6. TSMC’s share price has been moving not on last quarter’s results but on whether its customers will keep spending on AI. As that worry grew, the stock fell 4.8% in half a month, from 2,490 Taiwan dollars the day before its earnings release to 2,370 Taiwan dollars.

What fell on October 30 in Taiwan, and by how much

The TAIEX lost 1,156.50 points in a single day. It closed below its half-year moving average (the average of roughly the last 120 trading days, about 45,315) for the first time since June 2025.

• TSMC: down 1.86% to 2,370 Taiwan dollars, accounting for about 360 points of the index’s drop
• MediaTek: down 3.21%
• ASE (chip packaging and testing): down 2.20%
• Alchip (custom AI chip design): down 6.93%

Money moved into defensive stocks. Telecom carrier Chunghwa Telecom rose 1.27%, and food company Uni-President rose 1.52%.

⤢

The chart shows how large this year’s rally has been. The index climbed 72%, from 28,963.60 on the last trading day of 2025 to 49,822.55 on October 6.

How strong were TSMC’s Q3 results?

TSMC reported Q3 revenue of $46.72 billion on October 15, up 41.2% from a year earlier. That beat even the top of the guidance the company gave three months earlier ($44.6 billion to $45.8 billion).

• Net income: 763 billion Taiwan dollars, up 68.7% from a year earlier
• Gross margin: 66.4%
• 68% of revenue came from high-performance computing (HPC), such as Nvidia GPUs
• 2-nanometer share of wafer revenue: from 3% to 8% in a single quarter
• Q4 revenue guidance: $52.3 billion to $54.3 billion

Record results, yet TSMC shares slipped: 3 reasons

1. The stock is looking at the next round of AI spending

TSMC’s results reflect money its customers have already spent. The share price prices in first whether customers such as Nvidia and Google will keep ordering chips next year.

US tech stocks fell the night before Taiwan’s October 30 session (QQQ, which tracks the Nasdaq 100, fell 1.42%). Local analysts said that after Google and Intel released their outlooks, doubts resurfaced over whether the money poured into AI will earn back as much.

2. Foreign investors keep net selling Taiwan stocks

Foreign investors’ net sales of Taiwan stocks came to 112.47 billion Taiwan dollars on October 30 alone, the seventh-largest on record. For October as a whole, they sold 994.3 billion Taiwan dollars, the most ever in a single month.

On October 15, the day of the earnings release, a hotter-than-expected US September inflation reading added to the shock, and foreign investors sold about 302.5 billion Taiwan dollars, the largest single-day amount since the data began in 2004. TSMC fell 2.01% that day and another 0.82% the next. As the largest weight in Taiwan’s market capitalization, TSMC takes the biggest hit when foreign investors cut their Taiwan holdings.

3. A big run-up brings quick profit-taking

In a market up 72% this year, even a small disappointment easily sets off “lock in the gains first” selling. Trading value shrank further on October 30, and analysts said there was little buying on the dip ahead of the US midterm elections (November 3).

⤢

The stock went from 2,585 Taiwan dollars on October 6 to 2,370 Taiwan dollars on October 30, down 8.3%. Even after the earnings release, there was no real rebound.

4 things to watch on the next trading day

• The US ADR: After Taiwan’s market closed, TSMC’s ADR (TSM) ended October 30 in the US down 5.95% at $406.13. That could weigh on Taiwan’s session on November 2.
• 10% from the peak: Based on closing prices, the index is down 9.26%. A close below 44,840 would put it in what is commonly called a “correction.”
• Whether it gets back above the half-year average of 45,315: The writer is watching whether the index closes back above it.
• The size of foreign net selling: The writer is watching whether daily foreign net selling shrinks from these levels.

The economy itself is solid. Taiwan’s advance estimate of Q3 economic growth, released on October 30, came in at 14.36%, the fourth straight quarter of double-digit growth. The current decline is less about the economy and more the result of shaken expectations for AI spending.

This post is based on the close of October 30, 2026, and is not investment advice on any particular stock or product.

Frequently asked questions

Q1. Why did TSMC’s Taiwan-listed shares keep slipping even after its earnings release?

A1. Because they moved with the outlook for customers’ AI spending next year and with foreign selling, not with the results. They fell 4.8%, from 2,490 Taiwan dollars the day before the release to 2,370 Taiwan dollars on October 30.

Q2. Why do TSMC’s Taiwan shares and its US ADR move differently?

A2. Because they trade at different hours. News that comes out in the US after Taiwan’s market closes often shows up first in the ADR, and in the Taiwan-listed shares on the next trading day.

Q3. When Taiwan’s market wobbles, do Korean chip stocks fall too?

A3. They often move together. On October 15, when TSMC fell 2.01%, Samsung Electronics fell 9.48% and SK hynix fell 11.06%.

Sources: TSMC Q3 earnings release (October 15, 2026); Focus Taiwan and Taipei Times (October 30-31, 2026); Economic Daily News and TVBS (October 30, 2026); advance Q3 GDP estimate from Taiwan’s Directorate-General of Budget, Accounting and Statistics, Executive Yuan (October 30, 2026); prices: TAIEX and Taiwan Stock Exchange closes, US regular-session closes, adjusted (ADR, QQQ), KRX regular-session closes

---

Information only, not investment advice.