The downgrade of TSM by Needham is the equivalent of closing the barn door AFTER the horse has escaped. TSM's stock price has alread dropped almost 30% from its recent high of US $11.26.
TSM's quarterly report was not all that bad. But the point is, technology stocks in general and chip stocks in particular, have been hit very hard, so I believe the downside risk to TSM is limited. The two major risks to TSM and other stocks is if we have a very severe recession, or if there is a major terrorist attack in a strategic area. Remember 9/11??, the stock market was hit very hard.
Let's hope TSM stabilizes from here and the market recovers.