TSMC stock plunges 7.4% as Taiwan market rout hits AI chipmakers

TSMC's stock plunged 7.4% to T$2,075 on Friday as a historic wave of panic swept Taiwan's market, following heavy overnight losses in US tech stocks. A sweeping Democratic victory in the US midterm elections prompted investors to reassess regulatory risks around AI data centers. Democratic lawmakers were reportedly considering measures to restrict or slow AI industry expansion, directly threatening TSMC's core growth driver as the leading manufacturer of advanced AI chips. The decline was worsened by TSMC's ADR already falling over 10% in the prior US session, while foreign institutional investors accelerated exits and margin calls flooded the market. The broader TAIEX index opened down over 3,700 points, breaking below 40,000 for the first time in months, prompting a rare public statement from Taiwan's stock exchange. MediaTek and Hon Hai hit daily limits, while Korean markets triggered circuit breakers and Japanese stocks fell over 6%, confirming a coordinated global de-risking event focused on AI and semiconductor shares.