Taiwan Semi Had a Big Sales Miss. Why the Drop Is So Ominous for Chip Stocks.

Taiwan Semiconductor Manufacturing

is missing the mark on sales by a lot. But its big drop, reported Monday, isn’t only a red flag for the world’s most important chip maker. It spells trouble for the entire industry, too.

TSMC

(ticker: TSM) had a down March by any standard. Revenue was worse than expected. Now, with the last month of the first-quarter numbers out, the company’s March-quarter results total roughly $16.7 billion, missing the midpoint of the company’s guidance range of $16.7 billion to $17.5 billion and the Wall Street consensus of $17.2 billion.