TSMC Stock Falls On China Trade Breach

Taiwan Semiconductor Manufacturing (TSM) stock fell Monday following news reports that the company violated trade restrictions with China. TSM stock recently broke out.

In morning trades on the stock market today, TSM stock sank more than 3% to 196.33.

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Reuters reported that Taiwan Semiconductor, better known as TSMC, has suspended shipments to China-based chip designer Sophgo after a chip it made was found on a Huawei AI processor. Huawei is restricted from buying such chip technology to protect U.S. national security.

TSMC could face penalties from the U.S. Department of Commerce if it willfully violated U.S. export controls with China.

TSMC alerted Taiwan and U.S. authorities and began a detailed investigation after news broke that its chip had found its way into a Huawei product, Reuters said.

Taiwan Semiconductor is the world’s largest contract chipmaker. Its customers include top fabless semiconductor firms such as AMD (AMD), Apple (AAPL), Broadcom (AVGO), Nvidia (NVDA) and Qualcomm (QCOM).

TSM Stock Is On Three IBD Lists

On Sept. 19, TSM stock broke out of a cup-with-handle base at a buy point of 175.45, according to IBD MarketSurge charts.

TSM stock spiked to a record high of 212.60 on Oct. 17 after the company delivered a beat-and-raise earnings report.

Meanwhile, TSM stock is on three IBD lists: IBD 50, Global Leaders and Tech Leaders.

Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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