TSMC Is Down, the Iran War Is Rattling Chip Stocks, and That's Exactly Why Long-Term Investors Should Pay Attention

By Manali Pradhan, CFA – Mar 27, 2026 at 12:30PM ESTKey PointsIts stock has been negatively affected by geopolitical concerns, but core fundamentals remain strong.While investors may face short-term energy supply shocks, TSMC’s long-term thesis is intact.It's well-positioned for multi-year growth driven by massive capex spending and increasing AI adoption.Shares of Taiwan Semiconductor Manufacturing (TSM +0.37%) have declined by over 7% in the past month, as geopolitical tensions tied to the Iran conflict raise concerns about global supply chains. Hence, while the company's demand drivers remain intact, its risk perception has clearly shifted. Image source: Getty Images. Taiwan relies heavily on liquified natural gas (LNG) imports, much of which pass through the Strait of Hormuz. Any disruption in this corridor could increase energy costs and constrain TSMC's chip production. According to geopolitical commentator Shanaka Anslem Perera, Taiwan imports 97% of its energy requirements and holds just 11 days of natural gas reserves (as of March 23, 2026). Rising helium prices can also prove to be a possible bottleneck in advanced chip manufacturing. Demand remains strong Despite increasing investor concerns, TSMC's fundamentals remain exceptionally strong. For its 2025's fourth quarter, revenue grew 25.6% year over year to $33.1 billion, while gross margins and operating margins reached 62.3% and 54%, respectively. ExpandNYSE: TSMTaiwan Semiconductor ManufacturingToday's Change(0.37%) $1.22Current Price$327.33Key Data PointsMarket Cap$1.7TDay's Range$322.33 - $329.5652wk Range$134.25 - $390.20Volume732KAvg Vol14MGross Margin58.73%Dividend Yield1.03% Demand for the company's cutting-edge chips is also accelerating. High-performance computing (HPC), which includes artificial intelligence (AI) workloads, accounted for 55% of the fourth-quarter revenues. With AI adoption increasing across enterprise, consumer, and sovereign use cases, the demand for TSMC's cutting-edge chips is coming not only from direct customers, which are chip designers, but also from cloud service providers. TSMC is also preparing for a multi-year demand cycle. The company is planning for $52 billion to $56 billion in capex in 2026, largely focused on expanding advanced chip manufacturing capacity. The company expects close to 30% revenue growth in 2026, while AI accelerator revenues are estimated to grow in the mid- to high 50s percent annually from 2024 to 2029. With TSMC accounting for nearly 72% of the global foundry share at the end of 2025, the current share price pullback can be an attractive entry point for long-term investors.Read NextMar 27, 2026 •By Sean WilliamsInstitutional Investors Are Selling One of Wall Street's Premier Trillion-Dollar Club Members (No, Not Nvidia!)Mar 26, 2026 •By Stefon WaltersTSMC Has a Monopoly on Making AI Chips. Here's Why This Stock Could Be the Safest Bet in the $700 Billion Capex Boom.Mar 26, 2026 •By James HiresForget GPUs: Custom AI Chips Are the Next Trillion-Dollar Opportunity. Here Are 2 Stocks to Buy Now.Mar 26, 2026 •By Lyle Daly1 Compelling Reason to Buy Taiwan Semiconductor Stock Like There's No TomorrowMar 24, 2026 •By Chris Neiger3 Artificial Intelligence (AI) Stocks That Look Like Strong Buys Heading Into AprilMar 23, 2026 •By Manali Pradhan, CFAMeet the Super Semiconductor Stock That Isn't Nvidia, AMD, or BroadcomAbout the AuthorManali Pradhan, CFA, is a contributing Motley Fool stock market analyst covering technology, pharmaceuticals, medical devices, and industrial sectors. Manali brings prior experience as a healthcare analyst and team lead at Market Realist, a data equity analyst at Morgan Stanley, and a data analyst at Deloitte Financial Advisory Services. She holds a bachelor’s degree in computer engineering and a master’s in finance from Mumbai University.TMFManaBStocks MentionedTaiwan Semiconductor ManufacturingNYSE: TSM$327.33(+0.37%)+$1.22*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.