Foreign investors have made an about-face in their Taiwan stock investments this week, thanks to a blowout earnings result from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電).
After withdrawing US$4.5 billion from local shares through Thursday on post-election concerns and a pullback in US policy easing bets, global funds rushed back the next day following a solid growth outlook from the chip giant, data compiled by Bloomberg showed. They scooped up US$2.6 billion in equities on Friday.
That boosted foreign investors’ net buying of Taiwanese equities worth NT$80.17 billion (US$2.55 billion) on Friday, marking the second-biggest number on record. The TAIEX ended surging 2.63 percent to 17,681.62.
Photo: REUTERS
While cross-strait relations remain an overhang, particularly after Chinese officials said it might cancel tariff concessions for some Taiwan imports, TSMC’s projections for capital spending and revenue have raised hopes of a broad recovery in the tech sector this year.
“The political risk premia for Taiwan assets is likely to fade as investor interest shifts back to fundamentals,” Invesco Asset Management (景順投信) strategist David Chao said.
The nation’s tech sector “could benefit from a continuation of the increased tech exports we have seen in recent months, which were boosted by artificial intelligence-related products,” he said.
TSMC jumped more than 6 percent in Taiwan to NT$626 after its US depository receipts surged almost 10 percent to close at the highest level since February 2022.
TSMC, the main supplier of chips to Apple Inc and Nvidia Corp, sees a return to solid growth this quarter as it moves ahead with plans for plants in Japan, Arizona and Germany amid growth fueled by the boom in artificial intelligence development. Its earnings spurred the biggest rally for chipmakers in more than a month on Thursday and pushed the Nasdaq 100 index to close at an all-time high.
“The better-than-expected results from TSMC could be positive signals on demand recovery,” Billionfold Asset Management Inc chief executive officer and fund manager An Hyungjin said. “With strong AI demand, not only the US big tech firms but also most tech firms around the world have to invest in AI, and that could be good news to stock markets.”
Taiwan’s technology protection rules prohibits Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) from producing 2-nanometer chips abroad, so the company must keep its most cutting-edge technology at home, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the remarks in response to concerns that TSMC might be forced to produce advanced 2-nanometer chips at its fabs in Arizona ahead of schedule after former US president Donald Trump was re-elected as the next US president on Tuesday. “Since Taiwan has related regulations to protect its own technologies, TSMC cannot produce 2-nanometer chips overseas currently,” Kuo said at a meeting of the legislature’s
TECH WAR CONTINUES: The suspension of TSMC AI chips and GPUs would be a heavy blow to China’s chip designers and would affect its competitive edge Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is reportedly to halt supply of artificial intelligence (AI) chips and graphics processing units (GPUs) made on 7-nanometer or more advanced process technologies from next week in order to comply with US Department of Commerce rules. TSMC has sent e-mails to its Chinese AI customers, informing them about the suspension starting on Monday, Chinese online news outlet Ijiwei.com (愛集微) reported yesterday. The US Department of Commerce has not formally unveiled further semiconductor measures against China yet. “TSMC does not comment on market rumors. TSMC is a law-abiding company and we are
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
Semiconductor shares in China surged yesterday after Reuters reported the US had ordered chipmaking giant Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to halt shipments of advanced chips to Chinese customers, which investors believe could accelerate Beijing’s self-reliance efforts. TSMC yesterday started to suspend shipments of certain sophisticated chips to some Chinese clients after receiving a letter from the US Department of Commerce imposing export restrictions on those products, Reuters reported on Sunday, citing an unnamed source. The US imposed export restrictions on TSMC’s 7-nanometer or more advanced designs, Reuters reported. Investors figured that would encourage authorities to support China’s industry and bought shares
RSS