TSMC Eyes Massive Share Sale to Counter Local Currency Pressures – What Investors Need to Know

Taiwan Semiconductor Manufacturing Co. (TSMC) is reportedly gearing up for a blockbuster share sale—a strategic move to shield itself from the volatility of its local currency. Here's the breakdown.

Why Now? The chip giant's playbook reveals a classic hedge against currency swings. When your revenue is global but costs are local, even a strong home currency can bleed margins dry.

The Bigger Picture: This isn’t just about balance sheets. TSMC’s move signals how top-tier tech firms are forced to play financial chess while rivals focus on Moore’s Law. Meanwhile, Wall Street analysts will nod sagely—right before flipping their price targets.

Cynical Finance Jab: Nothing says 'confidence' like diluting shareholders to fight a currency war. But hey, at least it’s not another SPAC.

Stronger Taiwan dollar hits TSMC’s export earnings

TSMC is the largest exporter and main chip supplier to Apple Inc. and Nvidia Corp. Because most of its production is in Taiwan, a stronger dollar cuts into the U.S. earnings it brings home or forces it to raise overseas prices, which could hurt demand.

In June, Chief Executive Officer C. C. Wei told shareholders that operating margins had fallen by several percentage points due to the stronger local currency.

Last week, TSMC’s US-listed shares fell 2.5 %, while the Philadelphia Semiconductor Index slid 2 %. Applied Materials dropped 4 % and Dutch equipment Maker ASML lost 1.9 %.

In April, the company gave a positive forecast for the year based on AI demand. “Our job is to give customers enough chips, and we’re working hard on that. ‘Working hard’ means it’s not enough,” he said.

When asked about reports that TSMC is eyeing chip factories in the United Arab Emirates, Wei said the company has no such plans.

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