Pelosi Effect? Why Key Apple Supplier TSMC's Shares Are Slipping Today

Pelosi Effect? Why Key Apple Supplier TSMC's Shares Are Slipping Today

Shares of chipmaker Taiwan Semiconductor Mfg. Co. Ltd. TSM fell as much as 2.98% in Asia trading on Tuesday after China expressed anger at reports of U.S. House Speaker Nancy Pelosi making a possible trip to Taiwan later in the day.

The company is also a major supplier to iPhone maker Apple Inc AAPL.

The Taiwan Capitalization Weighted Stock Index, following ​​companies traded on the Taiwan Stock Exchange, fell more than 2%.

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China’s Response: Many Chinese warplanes are understood to have flown close to the median line dividing the Taiwan Strait, Reuters reported, citing sources. 

Chinese warships have remained close to the unofficial dividing line since yesterday. Both planes and warships "squeezed" the median line on Tuesday, an unusual move that is also "very provocative," according to sources quoted by Reuters.

The report also stated that Chinese aircraft repeatedly performed tactical moves, briefly "touching" the median line and moving back to the other side of the strait, while Taiwanese aircraft were on standby nearby.

Price Action: U.S. shares of TSM fell over 2.5% to $86.24 on Monday, and slipped a further 0.2% in after-hours trading, according to data from Benzinga Pro.

Posted In: chipmakersEurasiaNancy PelosisemiconductorstaiwanAsiaNewsPoliticsMarketsMoversTechTrading IdeasGeneral