Key contract chipmaker Taiwan Semiconductor Manufacturing Co (TSM  ) stock is trading lower on Thursday. The fall is affecting Taiwanese stocks, leading to their worst-ever selloff by foreign investors.

The key Nvidia Corp (NVDA  ) and Apple Inc (AAPL  ) supplier lost over 12% in stock value year-to-date in the U.S. market.

TSMC, which accounts for over a third of the Taiwan benchmark's weight, fell nearly 10% as foreign investors sold 155 million shares. Global funds slashed holdings for the past 12 sessions, offloading 391 billion New Taiwanese dollars ($11.9 billion) worth of Taiwanese stocks through Wednesday, Bloomberg cites from its data compilation on Thursday.

TSMC Chairman and CEO C.C. Wei recently emphasized that its latest $100 billion investment plan (on top of the $65 billion already committed) came from customer demand for its chips, which are critical for powering everything from the latest artificial intelligence systems to smartphones.

Wei also emphasized that the chipmaker remains committed to its target of building 11 production lines in Taiwan in 2025.

For context, since his presidential campaign, President Donald Trump has criticized Taiwan's near-dominance in advanced chip manufacturing and threatened tariffs on chip imports.

HSBC analysts told Bloomberg how the AI frenzy, market volatility, and uncertainty prompted investors to shift focus to non-tech. The emergence of Chinese AI startup DeepSeek, which claimed to create AI models at a fraction of rivals' cost, added to investor anxiety. DeepSeek's AI model release fueled a $1 trillion market cap wipeout. Nvidia lost $600 billion in market cap in a single day.

Price Action: TSM stock traded lower by 2.68% at $172.43 premarket at the last check on Thursday.