The emergence of DeepSeek's cost-effective AI model has raised concerns about the need for significant capital expenditure in AI technology, potentially affecting TSMC, a major supplier to Apple and Nvidia. Fund managers are reconsidering their AI-related investments, and there is a possibility of increased foreign outflows from Taiwan. Despite these challenges, some analysts remain optimistic about TSMC's long-term growth prospects due to its cutting-edge technology and reasonable valuation compared to competitors like Intel and Nvidia.
Key takeaways:
- TSMC shares fell by the most in nearly six months due to a global selloff in AI-linked stocks and news of DeepSeek's AI model potentially rivaling US developers.
- US President Donald Trump announced tariffs of 25% on Canada and Mexico and 10% on China, with potential sectoral tariffs on chips, metals, and drugs.
- DeepSeek's cost-effective AI model raises concerns about the need for significant capital expenditure, impacting TSMC's sales forecast and investor confidence.
- Fund managers may reassess their AI portfolio exposure, potentially leading to foreign outflows from Taiwan and affecting TSMC's stock performance.