Investing.com-- Taiwan shares of TSMC fell sharply on Monday as local trade resumed after a week, with the chipmaker’s shares now catching up with steep losses in their global peers on concerns over China’s DeepSeek artificial intelligence.
TSMC's (TW:2330) shares slid as much 6.6% in Taipei trade, headlining a 4.4% loss in the TWII.
Electronics giant Hon Hai (TW:2317) Precision Industry, which is also an NVIDIA Corporation (NASDAQ:NVDA) supplier, slid about 10% in Taipei trade.
TSMC is a major component of the AI supply chain, and has benefited greatly- in revenue and market valuation- from a rapid increase in AI development over the past year.
But this valuation spike was called into question last week with the release of China’s DeepSeek R1 AI model. The model appeared to be able to match the performance of similar offerings from OpenAI and Meta (NASDAQ:META) while using older hardware and a fraction of the latter’s budgets.
DeepSeek’s release sparked a rout in global chipmaking stocks, especially TSMC customer Nvdia, as investors questioned the need for hundreds of billions of dollars being invested in AI infrastructure, when companies could instead adopt leaner and more efficient AI models.
Nvidia lost as much as $600 billion in market capital, while broader tech valuations were wiped out by about $1 trillion in the past week.
TSMC’s U.S.-listed shares (NYSE:TSM) lost about 6% last week.