How does 20% Tariff affect TSMC price?

The deep research logic is organized as follows: 

Okay, let's tackle this question about how the 20% U.S. tariff on Taiwanese imports affects TSMC's stock price. First, I need to gather all the relevant information from the provided references and background. 

The user is asking specifically about the impact of the 20% tariff on TSMC's stock price. From the references, there are several key points. The tariff was announced on August 1, 2025, and it's effective starting August 7. The stock price reaction on August 1 showed a slight decline of -0.53% to $241.62. However, the user wants a deeper analysis beyond just the immediate price reaction.

Looking at the references, TSMC has been expanding in the U.S., investing $100 billion in Arizona fabs. This expansion is a strategic move to mitigate tariff risks. The company's Q2 2025 results showed strong revenue growth, with AI-related demand being a significant driver. The gross margin was 58.6%, but there's an expectation of dilution due to overseas fabs. 

The tariff's impact isn't uniform. Semiconductors are under a Section 232 investigation, which might lead to exemptions. The effective rate for semiconductors is lower at 8.3% due to exemptions. TSMC's customers like NVIDIA and Apple are relying on their chips, which might face higher costs but could adjust pricing or diversify supply chains. 

There's also mention of TSMC's warning about tariffs potentially harming their Arizona expansion. However, the company is pushing for pro-growth policies like tax credits to support U.S. manufacturing. The stock has a P/E ratio of 31, which is competitive with peers like NVIDIA and AMD. 

The user's profile shows interest in technical analysis and news-driven strategies, so including metrics like ADR premium and recent price movements would be relevant. Also, the user is interested in target prices and buy/sell signals, so discussing the potential upside if tariffs are reduced or if TSMC's expansion succeeds is important.

I need to structure the answer with a clear conclusion first, then break down the analysis into sections like market reaction, mitigation strategies, risks, and long-term outlook. Using tables to present data like stock price context, tariff details, and financial metrics will make it more digestible. Also, including the visualization for the query about the stock price reaction on August 1 is necessary.

I should ensure that all citations from the references are properly noted. For example, the stock price reaction is from reference 10, the tariff details from 6 and 17, and the expansion plans from 21 and 22. The analysis should tie these together, showing how the tariff affects TSMC's operations and financials, and how the market is reacting based on these factors.

Finally, the conclusion should summarize the key points, highlighting both the short-term risks and long-term opportunities. The user might be looking for whether to hold, buy, or sell TSMC, so providing a target price range and rationale based on the analysis would be helpful.

### 🌟 **Conclusion**
The 20% U.S. tariff on Taiwanese imports, effective August 7, 2025, introduces **short-term volatility risks** for TSMC (TSM) but also **long-term strategic opportunities**. The stock price reaction on August 1, 2025, reflects market uncertainty, with a **-0.53% decline** to $241.62, but TSMC’s **dominant position in AI chip manufacturing** and **$100 billion U.S. investment plans** position it to navigate these challenges.

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### 📊 **Market Reaction & Tariff Impact**
#### **Stock Price Context**
| Metric | Value | Implication |
|------------------------|----------------|---------------------------------------|
| **Closing Price (Aug 1)** | $241.62 | Slight decline (-0.53%) post-tariff announcement |
| **2025 YTD Performance** | +30% | AI-driven growth offsets near-term risks |
| **ADR Premium** | 24% | U.S. market optimism vs. Taiwan-listed shares |

#### **Tariff Details**
- **Effective Rate**: 20% on non-exempt goods, but **8.3% effective rate** for semiconductors due to exemptions .
- **Scope**: Affects ~25% of Taiwan’s exports to the U.S. .
- **Exemptions**: Semiconductors, AI chips, and tech components remain under U.S. national security probe (Section 232) .

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### 🛠️ **TSMC’s Mitigation Strategies**
1. **U.S. Expansion**: $100 billion investment in Arizona fabs , reducing tariff exposure for U.S.-produced chips.
2. **Customer Diversification**: 60% of revenue from AI/HPC segments , with demand resilient to short-term price hikes.
3. **Currency Hedging**: NT$ appreciation (11% YTD) offsets部分 tariff impact .

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### 📉 **Risks & Concerns**
1. **Supply Chain Disruption**: Tariffs could delay AI chip shipments to U.S. customers like NVIDIA and Apple .
2. **Revenue Pressure**: 2-4% annual gross margin dilution from overseas fabs .
3. **Competition**: Intel’s U.S. fabs (via TSMC partnership) and Samsung’s global expansion could erode TSMC’s market share.

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### 🚀 **Long-Term Outlook**
- **AI Growth**: TSMC’s N2/A16 technologies (2025H2 launch) promise 30%+ revenue growth in AI cloud services .
- **Tariff Negotiations**: Taiwan expects a lower rate post-Section 232 probe (results by Aug 15) .
- **Valuation**: P/E of 31 vs. peers (NVIDIA: 32x, AMD: 28x) , with upside potential if tariffs are reduced.

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### 🎯 **Key Takeaways for Investors**
- **Buy Signal**: TSMC’s AI leadership and U.S. investments justify a **$250-260 price target**.
- **Hold for Long-Term**: Tariffs are a near-term headwind but unlikely to derail TSMC’s dominance in semiconductors.
- **Watch for Catalysts**: Section 232 probe results (Aug 15) and U.S.-Taiwan trade talks .

|code|Ticker|Name|Date|Closing Price|market_code|
|---|---|---|---|---|---|
|TSM|TSM.N|TSMC|20250801|241.62|169|