Taiwan’s Central Bank stated Thursday that several external factors—including U.S. policies under President Donald Trump, geopolitical developments, and advancements in artificial intelligence—will significantly influence TSMC’s future performance and, by extension, Taiwan’s stock market.
In a report presented to the Central Bank’s board of directors, officials underscored the critical role played by Taiwan’s technology sector, particularly semiconductors, within the broader financial landscape.
TSMC alone represents nearly 40% of Taiwan’s total market capitalization, making it a pivotal driver of market performance. At the end of last year, technology stocks accounted for approximately 70% of Taiwan’s market capitalization, with semiconductor firms comprising nearly half of that total.
On March 3, TSMC announced plans to expand investments in the United States in response to uncertainties surrounding Trump administration policies. The announcement triggered a sell-off by foreign investors, leading to a noticeable downturn in Taiwan’s stock market.
Given TSMC’s significant influence, even minor fluctuations in its stock price heavily impact Taiwan’s stock exchange. Specifically, for every NT$1 (3 cents) change in TSMC’s share price, the benchmark TAIEX typically shifts by approximately 8.2 points.
The Central Bank acknowledged concerns that increased U.S. investments could lead to higher operational costs, potentially impacting TSMC’s profitability. However, it stressed that the company’s long-term trajectory would largely be shaped by global geopolitical developments and technological innovation.
