Taiwan Semiconductor Manufacturing Co (NYSE:TSM) stock is trading lower on Monday, triggered by capital outflows.

Taiwan’s foreign exchange reserves dropped by $1.6 billion in July, primarily due to foreign money exiting the market during recent global sell-offs, Reuters reports.

However, Taiwan Semiconductor continues to dominate Taiwan’s stock market, significantly contributing to the country’s impressive performance this year.

Also Read: Nvidia and Taiwan Semiconductor Hit Production Snags, Raising Concerns About AI Boom

The MSCI Taiwan Index has soared by nearly 28% year-to-date, doubling the S&P 500’s growth.

Taiwan Semiconductor, which has seen an almost 80% rally this year, accounts for over half of the MSCI Taiwan Index, and its market cap now exceeds the entire economy of Taiwan.

The tech giant’s success is part of a broader AI-driven market enthusiasm, with other companies like Hon Hai Precision Industry also benefiting. Apple Inc (NASDAQ:AAPL) supplier Hon Hai, doing business as Foxconn, which holds a 5% weight in the MSCI Taiwan Index, has seen its shares rise by 62% this year, according to Reuters.

Taiwan Semiconductor reported 45% revenue growth in July. Analysts told Bloomberg that they expect Taiwan Semiconductor’s third-quarter revenue to grow by 37% or more.

Investors can gain exposure to Taiwan Semiconductor through iShares Semiconductor ETF (NASDAQ:SOXX) and First Trust NASDAQ Technology Dividend Index Fund (NASDAQ:TDIV).

Price Action: TSM shares traded lower by 0.26% at $166.69 premarket at the last check Monday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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