Taiwan Semiconductor Manufacturing Co Ltd (NYSE:TSM) shares are dropping on Thursday as semiconductor stocks sell off broadly. The ongoing U.S.–Israel–Iran conflict is raising concerns about disruptions to key chipmaking materials.
- Taiwan Semiconductor stock is feeling bearish pressure. What’s behind TSM decline?
Middle East Conflict Sparks New Risks For Chipmakers
Rising instability in the Middle East is injecting new uncertainty into the chip sector. Analysts say the conflict threatens supplies of key manufacturing materials and could drive energy costs higher, a combination that may ultimately cool demand for semiconductors powering the AI boom.
CNBC reported Tuesday that the war has underscored how dependent chipmakers are on materials sourced from the region. Helium and bromine, both used in semiconductor production, could face supply interruptions if the conflict drags on.
Ray Wang, a memory analyst at SemiAnalysis, said a prolonged war could make it harder for chip manufacturers to secure these materials.
More than 25% of the world’s helium supply could be cut off if the Strait of Hormuz remains closed for an extended period, according to helium consultant Phil Kornbluth. The strait has been the site of repeated attacks, with Iran striking cargo ships and threatening economic targets linked to the U.S. and Israel.
Rising Energy Costs Could Slow AI Chip Demand
Morningstar analyst Jing Jie Yu said that if oil prices stay elevated, the cost of running AI data centers could rise sharply. Because AI facilities are far more energy‑intensive than traditional data centers, higher operating costs could slow expansion plans and reduce demand for the chips powering them.
Energy Secretary Chris Wright announced Wednesday that the U.S. will release 172 million barrels of oil from the Strategic Petroleum Reserve starting next week to help stabilize prices. But crude remains elevated, and analysts warn the release may not be enough if the conflict continues to disrupt supply.
Counterpoint Research analyst MS Hwang said data‑center operators may scale back capital spending if memory prices keep rising while electricity costs climb.
Conflict Reaches Day 13
Speaking in Hebron, Kentucky on Wednesday, President Donald Trump claimed the U.S. had already “won” the war against Iran, even as attacks continue across the region. He said U.S. forces had severely weakened Iran’s military capabilities, but offered no timeline for when the conflict might end.
Meanwhile, Iran condemned new EU sanctions targeting 19 officials and entities over alleged human‑rights abuses, calling the measures “absurd.” Foreign Ministry spokesperson Esmaeil Baqaei said the sanctions punish Iran for defending itself, after EU foreign policy chief Kaja Kallas confirmed the approval.
TSM Price Action: Taiwan Semiconductor shares were down 4.11% at $339.96 at the time of publication on Thursday, according to Benzinga Pro.
Image: Shutterstock
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