Chip Stock Selloff Deepens in Asia as TSMC Fails to Impress

Asian chip stocks tumbled more than 5%, with TSMC shares falling up to 4.5% in Taipei despite the company raising its 2026 capex guidance to $60-64 billion, as investors grew fatigued from the yearslong AI boom and concerned about rising equipment costs squeezing margins. A Bloomberg index of Asian chip stocks dropped roughly 19% from its June peak, with analysts noting that stretched valuations—TSMC trades at ~20x forward earnings versus a 5-year average of 18x—suggest sentiment is shifting toward rotation into other sectors.

Why it matters: Even TSMC's suppliers including Japan's Lasertec and Taiwan's Globalwafers fell on the results, while Morgan Stanley attributed the extra capex partly to equipment price inflation, adding disappointment over margin impact.