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.”
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‘SILVER LINING’: Although the news caused TSMC to fall on the local market, an analyst said that as tariffs are not set to go into effect until April, there is still time for negotiations US President Donald Trump on Tuesday said that he would likely impose tariffs on semiconductor, automobile and pharmaceutical imports of about 25 percent, with an announcement coming as soon as April 2 in a move that would represent a dramatic widening of the US leader’s trade war. “I probably will tell you that on April 2, but it’ll be in the neighborhood of 25 percent,” Trump told reporters at his Mar-a-Lago club when asked about his plan for auto tariffs. Asked about similar levies on pharmaceutical drugs and semiconductors, the president said that “it’ll be 25 percent and higher, and it’ll
NOT TO WORRY: Some people are concerned funds might continue moving out of the country, but the central bank said financial account outflows are not unusual in Taiwan Taiwan’s outbound investments hit a new high last year due to investments made by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and other major manufacturers to boost global expansion, the central bank said on Thursday. The net increase in outbound investments last year reached a record US$21.05 billion, while the net increase in outbound investments by Taiwanese residents reached a record US$31.98 billion, central bank data showed. Chen Fei-wen (陳斐紋), deputy director of the central bank’s Department of Economic Research, said the increase was largely due to TSMC’s efforts to expand production in the US and Japan. Investments by Vanguard International
WARNING SHOT: The US president has threatened to impose 25 percent tariffs on all imported vehicles, and similar or higher duties on pharmaceuticals and semiconductors US President Donald Trump on Wednesday suggested that a trade deal with China was “possible” — a key target in the US leader’s tariffs policy. The US in 2020 had already agreed to “a great trade deal with China” and a new deal was “possible,” Trump said. Trump said he expected Chinese President Xi Jinping (習近平) to visit the US, without giving a timeline for his trip. Trump also said that he was talking to China about TikTok, as the US seeks to broker a sale of the popular app owned by Chinese firm ByteDance Ltd (字節跳動). Trump last week said that he had
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