The TAIEX remains attractive this quarter and beyond after rallying above the 20,000 points last quarter, as major local firms would benefit further from artificial intelligence (AI) investment by global technology titans, analysts said.
US technology giants Microsoft Corp, Amazon.com Inc, Meta Platforms Inc and Alphabet Inc have increased AI spending, which might total US$175.9 billion this year, a 23 percent gain from a year earlier, Nomura Asset Management Taiwan Ltd (野村投信) said in a note.
The money would ramp up business at all firms on the global AI supply chain, of which Taiwan is an important part and the nation’s significance would not be ignored, Nomura Asset Management Taiwan said.
Photo: CNA
That explained why foreign portfolio managers have increased holdings in local shares by a net NT$160 billion (US$4.99 billion) so far this year, Nomura said.
The fund flows would continue, even though local shares have grown increasingly expensive with the price-to-earnings ratio rising above the five-year average of 18, it said, attributing its confidence to the expectation that corporate earnings would rise 30 percent this year.
In particular, Taiwanese semiconductor firms command global leadership positions in technology processes, enabling them to take part in the supply of cloud computing and AI services, two megatrends of the foreseeable future, Nomura said.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest advanced chipmaker, on April 18 is to report its first-quarter financial situation and give guidance on its business prospects.
TSMC yesterday said it would stick to its financial forecast for the whole year of this year, as most of its manufacturing equipment has resumed operations.
The world’s biggest contract chipmaker said in January that revenue this year would grow by at a low-to-mid-20s percentage from last year in US dollar.
Nomura said that demand for AI chips would exceed supply this year and the imbalance would continue into next year.
The TAIEX would receive additional support later this month and in May from the advent of new funds targeting local shares highlighting growth momentum and high dividends, analysts said.
Mega Investment Trust Corp (兆豐投信), Fuh Hwa Securities Investment Trust Co (復華投信) and Nomura Asset Management Taiwan are to raise money later this month in an apparent bid to copy the successful models of exchange-traded funds.
The cash would boost prices of component shares, which is what happened last month, with more than NT$200 billion poured into shares that promised high dividends.
KGI Securities Investment Trust Co (凱基投信), Taishin Investment Trust Co (台新投信) and Shin Kong Investment Trust Co (新光投信) are waiting for regulatory approval to launch similar products, which are a fast-growing source of fee income.
Semiconductor business between Taiwan and the US is a “win-win” model for both sides given the high level of complementarity, the government said yesterday responding to tariff threats from US President Donald Trump. Home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Taiwan is a key link in the global technology supply chain for companies such as Apple Inc and Nvidia Corp. Trump said on Monday he plans to impose tariffs on imported chips, pharmaceuticals and steel in an effort to get the producers to make them in the US. “Taiwan and the US semiconductor and other technology industries
SMALL AND EFFICIENT: The Chinese AI app’s initial success has spurred worries in the US that its tech giants’ massive AI spending needs re-evaluation, a market strategist said Chinese artificial intelligence (AI) start-up DeepSeek’s (深度求索) eponymous AI assistant rocketed to the top of Apple Inc’s iPhone download charts, stirring doubts in Silicon Valley about the strength of the US’ technological dominance. The app’s underlying AI model is widely seen as competitive with OpenAI and Meta Platforms Inc’s latest. Its claim that it cost much less to train and develop triggered share moves across Asia’s supply chain. Chinese tech firms linked to DeepSeek, such as Iflytek Co (科大訊飛), surged yesterday, while chipmaking tool makers like Advantest Corp slumped on the potential threat to demand for Nvidia Corp’s AI accelerators. US stock
The US Federal Reserve is expected to announce a pause in rate cuts on Wednesday, as policymakers look to continue tackling inflation under close and vocal scrutiny from US President Donald Trump. The Fed cut its key lending rate by a full percentage point in the final four months of last year and indicated it would move more cautiously going forward amid an uptick in inflation away from its long-term target of 2 percent. “I think they will do nothing, and I think they should do nothing,” Federal Reserve Bank of St Louis former president Jim Bullard said. “I think the
SUBSIDIES: The nominee for commerce secretary indicated the Trump administration wants to put its stamp on the plan, but not unravel it entirely US President Donald Trump’s pick to lead the agency in charge of a US$52 billion semiconductor subsidy program declined to give it unqualified support, raising questions about the disbursement of funds to companies like Intel Corp and Taiwan Semiconductor Manufacturing Co (台積電). “I can’t say that I can honor something I haven’t read,” Howard Lutnick, Trump’s nominee for commerce secretary, said of the binding CHIPS and Science Act awards in a confirmation hearing on Wednesday. “To the extent monies have been disbursed, I would commit to rigorously enforcing documents that have been signed by those companies to make sure we get
RSS