TSMC shares plunge 7.4% as Taiwan market rout hits AI chipmakers

Taiwan Semiconductor Manufacturing (TSMC) shares plunged 7.4% to T$2,075 on Friday amid a historic wave of panic selling in Taiwan's market, triggered by heavy overnight losses in US tech stocks. A sweeping Democratic victory in the US midterm elections prompted investors to reassess regulatory risks for AI data center construction and infrastructure spending. Democratic lawmakers are reportedly considering measures to limit or slow AI industry expansion, directly threatening TSMC's dominant role as the world's top advanced chip maker. The sell-off was amplified by TSMC's ADRs already falling over 10% in the prior US session, foreign institutional investors accelerating exits, and forced margin call liquidations cascading through the market. The broader market suffered severely, with the TAIEX opening down over 3,700 points, breaking below 40,000 for the first time in months and falling through its annual moving average, prompting a rare public statement from the Taiwan Stock Exchange. Peers MediaTek and Hon Hai hit daily downside limits, while the Philadelphia Semiconductor Index fell sharply with Nvidia, AMD, and Micron all losing near or over 10%. Korean markets triggered circuit breakers and Japanese stocks dropped over 6%, confirming a coordinated global risk-off event focused on AI and semiconductor shares.