Taiwan Semiconductor Short Interest Surges, Reaches 0.54% of Float

Taiwan Semiconductor's short percent of float has risen 3.85% to 0.54% of regular shares available for trading. Short interest matters as it can act as an indicator of market sentiment towards a particular stock. An increase in short interest can signal that investors have become more bearish, while a decrease in short interest can signal they have become more bullish. Taiwan Semiconductor has less short interest than most of its peers.

Taiwan Semiconductor Manufacturing Company Limited (TSM) has seen a notable increase in its short interest, with the short percent of float rising by 3.85% to 0.54% of regular shares available for trading [1]. This development signals a shift in market sentiment, indicating that more investors have adopted a bearish stance on the stock.

Short interest, which measures the number of shares sold short relative to the float, can serve as an indicator of market sentiment. An increase in short interest suggests that investors believe the stock is overvalued and may be positioning themselves to profit from a potential decline in the stock price. Conversely, a decrease in short interest could signal that investors are becoming more bullish on the stock.

TSM's short interest is relatively low compared to its peers, indicating that while the recent increase is notable, the overall level remains low. This could be attributed to the company's strong financial performance and strategic positioning in the advanced technology sector.

Recent developments at TSM include the decision to phase out its 6-inch wafer manufacturing to consolidate 8-inch production for better efficiency [2]. This move aligns with the company's long-term business strategy and aims to enhance operational efficiency. Additionally, TSM reported a significant revenue increase in July 2025, with a 22.5% rise from the previous month and a 25.8% increase from the previous year [1]. Despite these positive developments, the stock has experienced mixed market sentiments and recent volatility, with prices fluctuating between $234.71 and $245.74 [1].

Analysts maintain a ‘Buy’ rating with a target price of $220, despite the stock's recent volatility and the increase in short interest. Spark, TipRanks' AI Analyst, rates TSM as an "Outperform" due to the company's strong financial performance and positive earnings call sentiment [1]. However, the high valuation and technical indicators suggest caution due to potential short-term volatility.

In the options market, a significant number of trades indicate a mix of bullish and bearish sentiments. While 38% of traders were bullish, 41% showed bearish tendencies [3]. The trading activity suggests that investors are aiming for a price territory stretching from $80.0 to $270.0 for TSM over the recent three months.

As TSM continues to navigate market conditions and execute strategic initiatives, investors should closely monitor the stock's performance and the evolving sentiment. The recent increase in short interest underscores the importance of staying informed about market dynamics and adjusting investment strategies accordingly.

References:
[1] The Globe and Mail. (2025). Elevate Your Investing Strategy. Retrieved from https://www.theglobeandmail.com/investing/markets/stocks/TSM/pressreleases/34168202/diamond-hill-capital-boosts-stake-in-taiwan-semiconductor/
[2] Seeking Alpha. (2025). Taiwan Semiconductor to Phase Out 6-Inch Wafer Manufacturing in 2 Years. Retrieved from https://seekingalpha.com/news/4484426-taiwan-semiconductor-to-phase-out-6-inch-wafer-manufacturing-in-2-years---report
[3] Benzinga. (2025). Decoding Taiwan Semiconductor's Options Activity. Retrieved from https://www.benzinga.com/insights/options/25/08/47126478/decoding-taiwan-semiconductors-options-activity-whats-the-big-picture