(MENAFN- AFP)
Taiwanese giant TSMC tumbled with several other leading chip makers Friday as traders returned from a typhoon-imposed two-day break to play catch-up with a global tech rout.
Equities across the world tumbled after disappointing earnings from "Magnificent Seven" titans Alphabet and Tesla fuelled worries about the tech sector, which has driven a surge in markets and pushed all three main indexes on Wall Street to multiple record highs.
The rally, sparked by a frenzy to snap up firms linked to artificial intelligence, has led to speculation that valuations are far too high and a correction could be round the corner if reports from other heavyweights such as Apple and Amazon also fall short.
Taiwan Semiconductor Manufacturing Company controls more than half the world's output of silicon wafers -- considered the lifeblood of the global economy -- that are used to power anything from smartphones and cars to missile launch pads and stock markets.
Its major clients include Apple, Nvidia and AMD -- California-based firms regarded as the drivers behind a current explosion of generative AI products after the runaway success of ChatGPT.
With Typhoon Gaemi triggering massive storms Wednesday and Thursday on Wednesday and Thursday, Taiwan's stock market was closed.
On resuming trade Friday, TSMC tanked 6.5 percent at the open, its steepest drop in three months, according to Bloomberg.
The firm was among several chip makers to suffer, with ASE Technology off nearly 10 percent, MediaTek and UMC each shedding more than two percent.
That dragged the broader market down, with the Taiex off more than three percent.
The rally in all things tech helped TSMC, which is also listed in New York, to briefly break the US$1 trillion market capitalisation barrier this month, putting it ahead of Tesla as the seventh most valuable technology firm.
Profits at the firm jumped more than a third in the second quarter of 2024, while its revenues rose 32 percent on-year to US$20.82 billion.
The company expects its third-quarter revenue to jump to $23.2 billion, above expectations, according to Bloomberg News.
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