's (NYSE: TSM) stock dropped 5% on July 20 after the chipmaking giant posted its second-quarter results. Its revenue declined 14% year over year to $15.68 billion but beat analysts' estimates by $300 million. Its earnings per ADR also fell 26% to $1.14 -- its first profit decline in four years -- but still cleared the consensus forecast by six cents.

Those declines weren't surprising, since the global semiconductor market has been suffering a cyclical slowdown in a post-pandemic market, but a few gloomier details prevented the bulls from rushing back in. Let's review those red flags -- and see if they indicate that it's too late to invest in the world's largest and most advanced contract chipmaker.

Image source: TSMC.

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Source Fool.com