Taiwan Semi shares down 2.78%, option traders bearish despite put-call ratio

Taiwan Semiconductor Manufacturing Company (TSM) shares are down 2.78% at $232.37. Option traders are moderately bearish, with 80k contracts traded and puts leading calls for a put/call ratio of 1.54. Implied volatility is higher at 34.29, suggesting an expected daily move of $5.02.

Taiwan Semiconductor Manufacturing Company (TSMC) shares have experienced a decline of 2.78% to $232.37 as of July 2, 2025. This downward trend is accompanied by increased implied volatility, with an expected daily move of $5.02, as indicated by an implied volatility of 34.29. Option traders have shown a moderate bearish sentiment, with 80k contracts traded and a put/call ratio of 1.54.

Despite the recent stock price drop, analysts maintain a 'Buy' rating for TSMC, with a price target of $220. This positive outlook is driven by TSMC's robust financial performance and strategic positioning in advanced technologies [1]. The company has seen impressive revenue growth, with a 39.48% increase in the past twelve months, and continues to be a leading player in the semiconductor industry, boasting a market capitalization of $1 trillion [4].

TSMC's recent expansion into the United States, with plans to invest $100 billion, is a significant strategic move. This expansion includes the establishment of three new fabrication plants, two advanced packaging facilities, and a large R&D center. The company's first U.S. fab, operational since late 2024, has laid the foundation for this unprecedented foreign direct investment [3].

Analysts at Morgan Stanley have noted that TSMC's decision to shift some semiconductor orders to Samsung starting in 2027 is unlikely to have a major impact on TSMC’s earnings or valuation. The AI5 chip, set to launch in January 2026, will continue to be manufactured using TSMC’s 3nm process, while the AI6 chip will reportedly shift to Samsung in 2027 using a 2nm process, representing only about a 1% revenue loss for TSMC [1].

TSMC's growing U.S. presence highlights its role in securing the global semiconductor supply chain while addressing geopolitical risks. By bringing advanced chip production to the U.S., TSMC is diversifying its operations and strengthening domestic access to critical AI technologies, aligning with national interests in technological self-sufficiency [3].

Implied volatility for TSMC has fluctuated, suggesting potential short-term volatility. However, analysts remain optimistic about the company's long-term prospects, citing its strong financial performance and strategic positioning in advanced technologies.

References:
[1] https://www.ainvest.com/news/taiwan-semiconductor-manufacturing-company-limited-analysts-maintain-buy-rating-mixed-market-sentiments-strategic-2508/
[2] https://www.cnbc.com/2025/08/05/chipmaker-tsmc-says-it-has-discovered-potential-trade-secret-leaks.html
[3] https://theoutpost.ai/news-story/tsmc-s-ai-chip-dominance-propels-global-ranking-and-revenue-growth-18423/
[4] https://www.investing.com/news/swot-analysis/taiwan-semiconductor-manufacturing-companys-swot-analysis-ai-drives-stock-growth-amid-market-challenges-93CH-4154577