TSMCs Trading Volume Drops 4097% to 22nd Rank Amid Legal Scrutiny and AI Infrastructure Investments

On August 8, 2025, TSMC (TSM) traded with a volume of $2.54 billion, a 40.97% decline from the prior day, ranking 22nd in market activity. The stock closed down 0.33% amid mixed signals from recent developments. Despite a 26% year-on-year surge in July sales driven by sustained AI demand, the company faces scrutiny over a trade secret leak investigation, with three employees detained and legal proceedings initiated. TSMC also announced plans to invest up to $100 million in Arm Holdings’ IPO, signaling continued commitment to AI infrastructure. Meanwhile, Goldman Sachs raised its price target for TSMC to NT$1,370, citing robust client demand for advanced chips. The firm’s U.S. expansion, including three new fabrication plants, underscores its strategic focus on global semiconductor leadership.

Recent reports highlight TSMC’s pivotal role in AI advancements, with analysts noting its silicon photonics investments to enhance ChatGPT capabilities. However, concerns over slowing demand emerged as TSMC delayed chip equipment deliveries to suppliers, reflecting cautious capital expenditure planning. Intel’s stake sale in IMS Nanofabrication to TSMC further solidified their strategic partnership, though broader industry challenges, such as Samsung’s struggles in the AI chip race, indirectly underscore competitive pressures. TSMC’s legal troubles and production adjustments, including Arizona’s advanced packaging capacity expansion, indicate a balancing act between innovation and operational efficiency.

The strategy of purchasing the top 500 stocks by daily trading volume and holding them for one day delivered a 166.71% return from 2022 to the present, outperforming the benchmark return of 29.18% by 137.53%. This underscores the role of liquidity concentration in short-term stock performance, particularly in volatile markets. High-liquidity stocks, like those in the top 500 ranked by trading volume, exhibit amplified price swings and tend to perform well even when volume drops, as seen with TSMC’s recent trading pattern. This makes them suitable for strategies involving short-duration holdings, such as the one-day hold tested in this backtest.