TSMC shares fall after Nvidia CEO Jensen Huang resigns

TSMC shares fell in Taipei and New York on Thursday, November 12, as the departure of Nvidia ↘ 5.19% chief executive Jensen Huang shook the AI chip supply chain. The selloff outweighed two pieces of good news from earlier in the week: a record month of sales and a plan to invest up to $1 billion in Anthropic and OpenAI.

In Taiwan, TSMC gave up its early gains and closed down 2.30% at NT$2,340, according to Focus Taiwan. The stock alone took about 440 points off the Taiex, which ended 2.63% lower. Dealers blamed a roughly 8% drop in Nvidia shares in after-hours trading, which followed reports that its board was discussing whether to remove Huang. MediaTek and ASE Technology ↘ 4.18% also fell. TSMC's U.S.-listed shares dropped again in early New York trading. Benzinga reported that the decline came even as the S&P 500 ↘ 0.40% edged higher, which points to pressure aimed at chip stocks rather than a broad market selloff.benzinga.com+2

Nvidia's leadership shake-up

Nvidia's board announced Thursday that Huang had resigned as president, CEO and board member, effective immediately. Chief financial officer Colette Kress will serve as interim CEO and keep her CFO role while the board looks at internal and external candidates. Harvey Jones, a longtime director and former Synopsys ↗ 0.14% CEO, became the board's first-ever chair, Reuters reported.sec.gov+1

The resignation followed revelations of two extramarital affairs, including one with a woman suspected of spying for China, according to The Wall Street Journal News Corp ↘ 2.37%. The Journal had reported on Wednesday that the board was preparing to oust him. Jones said the board expects "the company's operations, customer commitments and product roadmap to continue without interruption," according to CNBC.wsj.com+1

Strong fundamentals pushed aside

The drop erased much of the rally that followed TSMC's Tuesday, November 10 update. The company reported October revenue of about NT$586.89 billion, up 59.7% from a year earlier and 14.7% from September. CNBC put the figure at $17.88 billion.cnbc.com+1

The same day, TSMC's board approved investments of up to $500 million in Anthropic common shares at its IPO price and up to $500 million in OpenAI preferred stock. Reuters said the move showed the chipmaker's confidence in long-term AI demand even as concerns grow about heavy AI spending. TSMC is a key supplier to Nvidia.pr.tsmc.com+1

Some analysts see the pullback as driven by sentiment more than by business results. GuruFocus said investors' next tests are TSMC's November sales report in early December and any order commentary from Nvidia's November 17 call.tradingview.com