A Tale of Two Trends: TSMC’s Record Performance Meets Institutional Profit-Taking

TSMC US8740391003

Taiwan Semiconductor Manufacturing Company (TSMC) presents a fascinating dichotomy for investors. On one hand, the chipmaking titan is posting staggering financial results. On the other, a notable shift is occurring behind the scenes, as some major funds are choosing to cash in on their holdings, creating a complex picture for the equity.

The operational story for TSMC remains exceptionally strong, as evidenced by its third-quarter 2025 figures. Revenue surged by 40.7% to reach $33.07 billion. This top-line growth was matched by impressive profitability; the company's gross margin expanded to 58.38%, underscoring its formidable pricing power in advanced manufacturing nodes. Consequently, gross profit jumped 45.5% to $19.31 billion.

This performance is largely fueled by unrelenting global demand for artificial intelligence (AI) semiconductors. TSMC commands an estimated 72% share of the worldwide foundry market, putting it in an enviable position as the primary production partner for most leading chip designers. The broader industry backdrop is also supportive, with the semiconductor sector projected to grow into a trillion-dollar market by 2030.

Major Fund Executes Strategic Reduction

Against this backdrop of operational excellence, a significant move by a prominent investor has captured market attention. Global X Japan filed a mandatory disclosure revealing a substantial reduction in its TSMC stake during the third quarter. The fund sold 21,430 shares, slashing its position by 52.5%. Its remaining holding of 19,398 shares is currently valued at approximately $5.42 million, moving TSMC down to the 28th largest position in its portfolio.

Transactions of this nature typically signal portfolio rebalancing, especially following a prolonged period of substantial gains for semiconductor stocks. For TSMC, which has seen its shares appreciate nearly 100% since their low in April, such profit-taking by institutional investors is a common dynamic after a powerful multi-year rally.

Growth Narrative Intact Amid Portfolio Rotation

The current scenario highlights a classic tension in high-growth equities. While the underlying business continues to expand robustly, some investors inevitably choose to lock in profits after a significant price advance. The sales by Global X Japan are less an indictment of TSMC's fundamentals and more a tactical portfolio decision. The core investment thesis—TSMC's indispensable role in the global tech supply chain—remains undimmed, even as certain shareholders rotate capital.

The juxtaposition of record-breaking financial metrics and institutional selling illustrates the different time horizons and strategies at play in the markets. One group focuses on the enduring growth trajectory driven by AI and technological adoption, while another acts on shorter-term valuation considerations after a historic run.