Markets

Eight Straight Losses for Chip Stocks, Even After TSMC's Record Quarter and a Bigger Forecast

TSMC posted $46.72 billion of revenue, a 66.4% gross margin and guided to as much as $54.3 billion next quarter. Its US shares still fell 1.80%, and the VanEck Semiconductor ETF dropped for an eighth day, 11.8% below its October 5 close.

Oct 16, 2026

If a record quarter from the company that makes most of the world's advanced chips could not stop the slide, it is fair to ask what can. Taiwan Semiconductor Manufacturing reported third-quarter revenue of $46.72 billion on October 15, above the top of its own $44.6-45.8 billion guidance, with a gross margin of 66.4% and an operating margin of 58.7%. Net income of NT$763.1 billion was up 68.7% from a year earlier, a sixth consecutive record.

The outlook was bigger still. TSMC guided to fourth-quarter revenue of $52.3-54.3 billion, raised its forecast for full-year 2026 growth to about 44% in US dollar terms, and said demand for AI accelerators, networking chips and advanced packaging remains above its production capacity. Capital spending plans were left unchanged.

The shares fell anyway. TSMC's US-listed stock dropped as much as 4% early, according to Yahoo Finance, and closed down 1.80% at $422.25, its lowest since September 16; in Taipei the stock lost 2.01%. The VanEck Semiconductor ETF (SMH) fell 1.04% to $558.84, its eighth straight decline and 11.8% below its October 5 close. Nvidia lost 1.84% to $217.23 and AMD 1.50%, both at their lowest closes since mid-September; Intel fell 2.80% to $95.37, its lowest since September 3. The one bright spot was Micron, up 1.87% after five straight losses.

"I think the street is tiring of the Bank of Nvidia, the Bank of AMD and the Bank of Broadcom," Baird technology strategist Ted Mortonson told Yahoo Finance, referring to the chipmakers' growing role in financing their own customers. That is the thread connecting this week's selling: not whether AI demand is real — TSMC just said it exceeds supply — but who is paying for the build-out, with what, and at what interest rate.

The sell-off has spread well beyond the United States. Seoul's Kospi fell 7.57% on October 15 and Tokyo's Nikkei 4.90%, with memory-chip makers leading the declines. A rebound in Asia on Friday morning, with the Kospi up 2.48%, is the first sign of buyers returning.