Can TSMC's Earnings Call Save the Market? Taiwan Stock Index Futures Plunge Over 700 Points in Night Session, Three Major Institutions Sell Short TSMC Shares Worth NT$43.1 Billion

Taiwan's stock market opened lower today (16th) but recovered slightly by the close, ending down only 6.61 points. Although TSMC reported impressive second-quarter earnings and delivered an optimistic outlook during its earnings conference, the results failed to meet market expectations. The Taiwan Stock Exchange Futures initially rose but reversed in the afternoon, continuing to decline in the night session starting at 3:00 PM. At the time of reporting, the index had plunged over 700 points, breaking below the 45,000-point threshold.

According to post-market data, the three major institutional investors collectively sold short NT$43.143 billion worth of shares today. Foreign investors sold short NT$48.335 billion, proprietary traders sold short NT$3.358 billion, and investment trusts bought NT$8.549 billion.

Analyzing the net positions in Taiwan Stock Index Futures, foreign investors increased their net short positions by 4,896 contracts to 84,453 contracts. Among the top ten traders, the net long positions of institutional investors across all months decreased by 3,570 contracts, leaving only 625 contracts.

In terms of open interest in options, the highest open interest for August call options was at the 50,000-point strike, while put options peaked at 37,200 points. For July F3 options, the highest open interest for calls was at 48,000 points and for puts at 43,000 points. The overall put/call ratio across all months dropped from 1.04 to 0.93. Foreign investors' net amount in call options was -NT$172 million, while their net amount in put options was NT$67 million.

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TSMC Raises Full-Year Capital Expenditure Forecast to $60–64 Billion

TSMC reported a net profit of NT$706.56 billion in Q2, up 23.4% quarter-on-quarter and 77.4% year-on-year, with earnings per share at NT$27.25. Gross profit margin rose to 67.7%, operating profit margin reached 60.3%, and net profit margin stood at 55.6%.

To support customer demand, TSMC announced during its earnings call that it is raising its full-year capital expenditure forecast to $60–64 billion, a new record high. This represents a 7%–14.3% increase, exceeding market expectations.

TSMC Chairman and CEO C.C. Wei stated that with support from the U.S. government, TSMC will invest $100 billion in Arizona to build multiple semiconductor wafer fabs using 2-nanometer and more advanced process technologies, along with advanced packaging facilities, to meet strong demand from key U.S. customers over the coming years.

Looking ahead, TSMC forecasts third-quarter revenue between $44.6 billion and $45.8 billion. Benefiting from robust AI demand, the company has raised its full-year U.S. dollar revenue growth rate to slightly over 40%.