The stock market is susceptible to a plethora of factors that sometimes people know and sometimes they don’t. Recently we got to see a very unusual trend in stocks out of nowhere. Suddenly stocks of tech companies started falling. The market was confused by this downfall but this has got a back story.
Recently Taiwan’s chip-making company reported that it will increase the price of chips starting next year. Taiwan is the largest manufacturer of chips and plays a vital role in deciding its price. Most of the companies are dependent on companies based in Taiwan. According to a rule of the market as prices go up the demand for that product goes down. TSMC saw a downfall of 0.40%, Alphabet 2.10%, Apple 1.38%, and Microsoft 0.31%.
To fight such a downfall in the future Apple has announced that it will use chips built in the US at an Arizona factory. Then it won’t have to depend on TSMC fully. That can be devastating for it if chip prices will drive the price of Apple products. Just in a few months, the prices will go high and that’s causing less demand for tech products in the market. It would be interesting to see how these companies curb these issues.
