TSMC (TSM) in the second half of 2025: The semiconductor leader and market dynamics in the AI wave
⚙️ I. Industry demand: Structural growth driven by AI and HPC
Core position in AI chip foundry: As the core foundry for leading AI chip companies such as NVIDIA, TSMC continues to benefit from the global expansion of AI computing power. Global AI spending is projected to exceed $337 billion in 2025, with surging demand for advanced process nodes (3nm/2nm), directly supporting its revenue growth.
Consumer Electronics Recovery and AI Terminal Penetration: The upgrade wave of AI-enabled devices such as generative AI smartphones and AI PCs is driving orders for mature process nodes. TSMC balances capacity utilization through a diversified process node portfolio, mitigating risks from market volatility in any single segment.
📊 II. Technical Analysis: Volatility in Recovery and Key Resistance Levels
Technical Recovery After the Stock Market Crash: During the global stock market crash in April 2025, TSMC's stock price plummeted nearly 10% in a single day, forming an oversold gap in the short term. The second half of the year entered a phase of oscillating recovery, with 230 USD becoming a key support level. If it holds steady, it may challenge the 250-260 USD range (corresponding to the early 2025 high).
Options market signals: Recently, institutions have concentrated on buying put options with strike prices between 240 and 245 USD, reflecting cautious expectations of short-term technical resistance; however, long-term call option holdings have increased, indicating optimism about the ramp-up of advanced processes in 2026.
🧠 III. Market sentiment and institutional dynamics
ARK funds bucking the trend: By late July 2025, the ARKK and ARKW funds had increased their holdings in TSMC by 10.47% and 6.02%, respectively, indicating that innovative capital is bullish on its long-term technological moat and the irreplaceable nature of its AI supply chain.
Short Selling Pressure and Liquidity Dynamics: The value of outstanding contracts for large-sized put options (240/245 Put) expiring in September exceeds USD 20 million, indicating short sellers are betting on a short-term correction; however, if earnings exceed expectations or AI order growth is announced, it could trigger a short covering rally.
⚠️ IV. Risk Factors: Dual Challenges from Geopolitical Tensions and Technological Iteration
Tariff policy uncertainty: If the US imposes new tariffs on semiconductor imports (rumored to be announced by the Trump administration in August), it could directly impact cost structures and customer order allocation strategies.
Technological iteration competition: Intel has secured the first prototype of a high-numerical-aperture (High-NA) EUV lithography machine, intensifying competition in the 2nm process node. TSMC must accelerate mass production to maintain its foundry market share advantage.
💡 V. Investment Strategy: Trend Following and Event-Driven
Trading Window:
Bullish Strategy: If the price breaks above $240 with increased trading volume, follow the trend;
Hedging Strategy: Hold the spot position while selling a $245 strike price call option (Covered Call) to lock in profits and hedge against volatility.
Biya is a very convenient and user-friendly tool, particularly prominent in the US and Hong Kong stock markets. It provides access to more information, eliminating the need to use multiple platforms, making it highly convenient and practical.
Long-Term Investment Timing:
A pullback below $220 can be viewed as a value buying opportunity, corresponding to an expected price-to-earnings ratio of 18-20 times for 2026, below the industry average.
Biya is still very useful.
Market consensus: TSMC is expected to follow an “upward trend with volatility” in the second half of the year, with AI demand serving as the long-term growth engine. However, technical adjustments and policy uncertainties may amplify short-term volatility. Traders should balance the scarcity of chip foundry services with macroeconomic noise.