TSMC Stock Plunges 2.54% on Grant Conversion, Sales Slowdown

On September 2, 2025, TSMC's stock experienced a significant drop of 2.54% in pre-market trading, reflecting a notable decline in investor sentiment.

One of the key factors contributing to TSMC's stock tumble is the potential conversion of a $6.6 billion grant from the Commerce Department into an equity investment. This move could effectively remove $6.6 billion in "free money" from TSMC's balance sheet, impacting its financial flexibility and potentially dampening investor enthusiasm.

Additionally, TSMC's recent warning about a sales slowdown in the third quarter has added to the market's concerns. This forecast, coupled with the broader economic uncertainties, has led to a more cautious outlook among investors, further pressuring the stock price.

Despite these challenges, TSMC remains a dominant player in the global semiconductor market, holding nearly 70% of the foundry market share. Major tech companies, including Nvidia, AMD, and cloud hyperscalers, rely heavily on TSMC's fabrication capabilities, underscoring its strategic importance in the industry.