Taiwan Semiconductor Manufacturing (TSMC) will be be in focus on Feb. 3 after a global selloff of AI-linked stocks.

The selloff was prompted by the emergence of DeepSeek, a Chinese startup with a cost-effective AI model that poses challenges to established developers.

TSMC’s US-listed shares dropped 13% on Jan. 27 before recovering some losses later in the week.

This sparked concerns about potential budget cuts in AI development, which could impact TSMC, a key supplier to Apple and Nvidia.

Gary Tan of Allspring Global Investments noted that DeepSeek’s emergence may lead investors to explore AI opportunities beyond hardware, especially in Taiwan and Korea.

As Taiwan’s market faces pressure, foreign outflows could rise, with overseas investors selling US$1.26 billion in local shares in January.

Despite challenges, TSMC’s competitive valuation and advanced technology continue to attract interest, trading at 19 times forward earnings, lower than rivals like Intel and Nvidia.