Core Takeaway
TSMC delivered $40.2 billion in second-quarter revenue, a 67.7% gross margin and NT$706.6 billion in net income, while lifting full-year U.S.-dollar revenue growth to slightly above 40%. AI demand is not peaking, but beating expectations alone no longer expands valuation.
The selloff is a repricing of capital returns. 2026 capex rose to $60-64 billion while third-quarter gross-margin guidance of 65%-67% is below the second quarter. Investors now want expansion to translate into free cash flow.
Broad AI Tech De-risking
Taiwan's index fell about 5.2% intraday and TSMC about 5.1%. Nasdaq, GPUs, memory, networking chips and Korea exposure fell together on TraderXYZ, consistent with a 4.3% prior-session drop in the Philadelphia Semiconductor Index.
Memory remains the most crowded and volatile segment, while MRVL, AMD and INTC also face heavy pressure. Strong demand now coexists with high valuation, heavy positioning and elevated capex.
ASML and TSMC both confirm that advanced-node capex is rising. That improves order visibility but makes 2027-2028 supply, depreciation, financing costs and return on capital the new valuation debate.
Watch Frame
Watch Taiwan near 43000 and TSMC at 2340-2350, especially whether the close moves away from intraday lows.
At the U.S. open, validate through TSM, NVDA, AMD, MU, SKHY, SNDK and SOXX / SMH volume. Higher earnings with lower multiples suggests valuation compression; falling margin or free-cash-flow estimates require more caution.
Keep monitoring oil, U.S. yields and the dollar. When all three rise together, high-valuation technology faces the greatest pressure.