The New Taiwan dollar fell to its weakest level in more than eight years, as a selloff in semiconductor shares intensified outflows from local equities.
The currency dropped as much as 0.6 percent to 32.79 per dollar yesterday, the weakest since 2016. Global funds sold a net US$1.79 billion of Taiwanese equities on Thursday, exchange data showed, the most since April and the fifth straight day of outflows.
The NT dollar was impacted by broad strength in the greenback and outward remittances by foreign investors despite dollar sales by exporters, said traders, who asked not to be identified, because they are not authorized to speak publicly.
Photo: Chen Mei-ying, Taipei Times
Shares of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, have declined over the past few sessions after US President Joe Biden’s administration floated tougher trade restrictions on China. TSMC’s stock price plunged 3.48 percent to close at NT$970, the lowest since July 3.
Former US president Donald Trump’s comments on Taiwan taking away the US’ chip business and his questioning of whether the US should defend Taiwan have added to investor concern.
“Rising tech stock volatility has triggered strong foreign equity outflows,” BNP Paribas SA greater China foreign exchange and rates strategy head Ju Wang (王菊) said.
“It is a typical risk off reaction. If the weak trend continues, we will see if authorities come out to smooth the trend,” he added.
NT dollar trading volumes jumped to the highest since 2022 yesterday. The currency is the biggest laggard among Asian currencies this month, down about 1 percent, and has slumped more than 6 percent this year.
VALUE: TSMC’s market capitalization far exceeds the combined size of all the Latin American companies on MSCI Inc’s benchmark for emerging markets Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) US$420 billion equity rally this year would get a valuation test this week when it reports earnings, with analysts expecting the chipmaker to raise full-year sales forecasts. The world’s biggest contract chipmaker would probably report a 29 percent increase in second-quarter net income on Thursday, according to the median estimate of analysts surveyed by Bloomberg. More importantly, analysts from JPMorgan Chase & Co to Morgan Stanley expect it to also raise its full-year sales guidance, justifying another round of valuation expansion. Just like Nvidia Corp, TSMC has become a favorite artificial intelligence (AI)-bet for investors with
ASSASSINATION ATTEMPT: The previous shooting targeting a US president or major party candidate was the 1981 incident targeting then-US president Ronald Reagan Saturday’s shooting at former US president Donald Trump’s election rally raises his odds of winning back the White House, and trades betting on his victory would increase this coming week, investors said yesterday. Trump was shot in the ear during the rally in Pennsylvania on Saturday in what the authorities were treating as an assassination attempt. Trump, his face spattered with blood, pumped his fist moments after the attack, and his campaign said he was fine after the incident. Before the shooting, markets had reacted to the prospect of a Trump presidency by pushing the US dollar higher and positioning for a
Powerchip Semiconductor Manufacturing Co (力積電) yesterday said that net losses ballooned to NT$1.96 billion (US$60.1 million) in the second quarter, as heavy manufacturing costs from a new fab outweighed the improvement in customer demand and factory utilization. That compared with losses of NT$439 million in the first quarter. The company posted a net profit of NT$617 million a year earlier. Gross margin plummeted to 5.3 percent last quarter, from 15.4 percent in the previous quarter and 16.8 percent in the same period last year. It was the weakest since the fourth quarter of last year. The chipmaker blamed heavy depreciation and higher manufacturing
INVESTMENT: The company’s planned complex in Texas would be the first 12-inch silicon wafer fab built in the US in more than 20 years, a GlobalWafers official said GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said it secured up to US$400 million in direct funding from the US Department of Commerce under the CHIPS and Science Act for the construction of two new advanced fabs in the US. Its subsidiaries GlobalWafers America and MEMC LLC are to build a 12-inch silicon wafer fab in Sherman, Texas, and another one in Missouri to produce silicon-on-insulator (SOI) wafers used to make leading-edge chips. “With the support of the [US President Joe] Biden Administration, we are honored to be bringing to American shores the world’s most cutting-edge 12-inch semiconductor