Chip stock selloff deepens across Asia as TSMC results fail to impress and Taiwan enters a correction

6:00 AM · July 17, 2026

Taiwan's stock market fell into a technical correction as a broad chip sector selloff deepened across Asia, according to Bloomberg, after Taiwan Semiconductor Manufacturing Company's results stoked investor worries over heavy spending and profitability even as the company raised its outlook. TSMC shares fell more than 7 percent in Taipei even though the company now expects capital expenditure of 60 billion to 64 billion dollars in 2026, at least 4 billion dollars higher than its previous forecast, and is projecting revenue growth of slightly above 40 percent, well ahead of the 30 percent plus it had predicted earlier in the year. Analysts and investors framed the reaction as fatigue with a multi year AI spending boom rather than a rejection of TSMC's underlying business, with rising costs increasingly overshadowing otherwise strong demand signals in investors' eyes. The selloff was compounded by two other developments unsettling the broader AI trade on the same day, China's Moonshot unveiling Kimi K3, widely described as the largest publicly downloadable AI model yet released, intensifying competitive pressure on US labs, and separate reporting that Alphabet's flagship Gemini 3.5 Pro model remains behind its planned release schedule. Together, the three stories left investors with a more skeptical read on the pace and payoff of AI infrastructure spending than they had going into the week, even as the underlying demand data from TSMC's own numbers continued to point upward.