Despite robust financial performance, TSMC’s stock experienced a significant decline in value due to the precipitous drop in the Nasdaq index.

Taipei-listed shares of TSMC closed 3.5% lower on Friday due to ongoing geopolitical concerns and losses in U.S. markets, despite the company's strong earnings and positive revenue outlook.

TSMC, a key supplier for Apple and Nvidia and the most valuable listed company in Asia, has been able to thrive amidst the global artificial intelligence surge, which has helped offset the decline in electronics demand following the pandemic.

The semiconductor giant exceeded market expectations with its second-quarter net profit announcement on Thursday and revised its 2024 revenue forecast to show growth slightly above the mid-20% range in U.S. dollar terms, up from the previous estimate of growth in the low to mid-20% range.

All three primary U.S. stock indices experienced declines on Thursday, with the Nasdaq, which is heavily focused on technology, recording its most significant single-day decrease since December 2022. Additionally, the chip sector saw its largest daily percentage drop since the panic-induced shutdowns of March 2020.

Allen Huang, a vice president at Mega International Investment Services in Taipei, expressed concerns regarding the declines in the Nasdaq and chip stocks.

He mentioned that this downward trend may not be short-term and could potentially continue for the next two to three months. Furthermore, Huang noted that TSMC was negatively impacted by this trend as well as comments made by former President Trump, and its earnings did not surpass market expectations by a significant margin.

TSMC's stocks had been performing well until this week when U.S. Republican presidential candidate Donald Trump made comments accusing Taiwan of stealing America's semiconductor business and suggesting that the island should pay the United States for its defense. As a result, Taiwan's main index closed 2.3% lower on Friday, and the Taiwan dollar reached its lowest level since May 2016.

Despite this, the American Depository Receipts of TSMC, the world's largest contract chipmaker, managed to gain 0.4% on Thursday, after initially rising by as much as 4% earlier in the day following its earnings call.

TSMC has consistently stated its intention to maintain the majority of its manufacturing operations, along with research and development, in Taiwan. However, the company is also committing $65 billion to construct three factories in the state of Arizona in the United States.

Known as the "sacred mountain protecting the country" due to its crucial contribution to Taiwan's export-driven economy, TSMC currently faces minimal competition, despite efforts by Intel and Samsung to disrupt its market dominance.