Taiwan Semiconductor Manufacturing Co. saw downward pressure on its share price in Taipei on Friday as investors booked profits following a stretch of record highs leading into the company’s strong first-quarter results.
Market participants cited two main drivers of the pullback: profit-taking after recent gains and fresh unease about potential supply interruptions for key specialty materials needed in chip production. Concerns over the company’s capacity to keep up with surging demand also contributed to the weakness.
In Taipei trading TSMC (TW:2330) declined 2.4% to T$2,305.0. The move followed a 3.1% drop in the company’s U.S.-listed shares (NYSE:TSM) in overnight trading. Earlier in the week the stock’s Taipei listing had reached a record intraday high of T$2,101.46.
Quarterly results and near-term outlook
On Thursday TSMC reported a record-high profit for the first quarter of 2026, driven by strong demand for advanced chips from the artificial intelligence sector. The company reiterated that AI-related spending on chips and data-center infrastructure is expected to increase in the months ahead, and announced plans to further raise capacity to meet that growing demand.
At the same time, TSMC cautioned that disruptions to the supply of certain specialty materials - specifically helium and bromine - could pose longer-term risks to profitability. The firm said it had secured alternative chemical sources for the near term but described the longer-term outlook for material flows as uncertain.
Geopolitical and supply-chain pressures
TSMC linked recent disruptions to the U.S.-Israel war on Iran, saying the conflict had significantly interrupted the movement of materials from the Middle East to Asia and had led to production stoppages following attacks on plants in the region. While the company believes near-term alternatives are in place, it did not rule out potential longer-term implications for material flows and production continuity.
Capacity questions and customer dynamics
The chipmaker acknowledged continued robust demand for AI chips but also faced questions from analysts about whether capacity constraints could prompt customers to seek alternative suppliers. TSMC’s CEO C.C. Wei responded that building independent chipmaking infrastructure at the scale of TSMC would require at least three years and substantial capital expenditure, implying that any customer transition would be neither quick nor simple.
Earlier reporting this year noted that a leading AI chip customer may need to delay next-generation products due to capacity limits at TSMC, highlighting the operational stretch felt across parts of the supply chain. TSMC said it will increase capital spending in coming quarters to expand capacity.
Implications for markets
The combination of profit-taking, supply concerns for specialty materials, and questions about near-term capacity has produced a cautious tone around the stock despite the company’s record quarterly profit and plans for elevated capital investment to scale production.
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