Taiwan Semiconductor’s $60B-$64B capex plan sparks sell-off, weighing on tech-heavy indexes despite earnings beat.
Semiconductor stocks extended losses for a fourth session, pulling the Nasdaq Composite down 0.9% by midday Thursday. The Dow Jones Industrial Average limited its decline to 0.1%, supported by healthcare gains, while the S&P 500 fell 0.3%.
Taiwan Semiconductor Manufacturing (TSM) reported earnings above estimates but announced a $60 billion to $64 billion capital expenditure plan for 2024, up from a prior $52 billion to $56 billion forecast. The company also committed $100 billion to Arizona chipmaking facilities, unsettling investors. SK Hynix (SKHY) plunged 9.1%, Micron (MU) dropped 6.3%, and Nvidia (NVDA) fell 2.7%.
The sell-off underscored broader concerns over aggressive spending in the sector, despite TSM’s lack of direct weighting in major U.S. indexes. Chip stocks have now erased nearly 30% of recent gains since post-IPO highs.