Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) shares fell the most in three months yesterday upon trading resumption, joining a global technology rout as investors dramatically soured on the promises of artificial intelligence (AI).
The shares declined 5.62 percent to close at NT$924 in Taipei, dragging down the benchmark TAIEX, which fell 3.29 percent to 22,119.21 points amid a technical correction, Taiwan Stock Exchange data showed.
Other chip stocks also fell, with ASE Technology Holding Co (日月光投控) plunging 9.86 percent, MediaTek Inc (聯發科) dropping 2.35 percent, Realtek Semiconductor Corp (瑞昱) falling 1.33 percent and United Microelectronics Corp (聯電) retreating 1.17 percent, while Apple Inc manufacturing partner Hon Hai Precision Industry Co (鴻海精密) slumped 4.71 percent.
Photo: CNA
Local markets reopened after a two-day closure due to Typhoon Gaemi.
Lackluster earnings from US technology firms have set off a reckoning on the AI hype.
The latest technology rout adds further pressure on TSMC, whose record-breaking rally has been faltering since the middle of this month. A favored AI play due to its cutting-edge chips and stellar earnings, concern over a pricey valuation and the risk of tighter US curbs on chip sales to China have poured cold water on the bullish momentum.
The rotation out of valuation-stretched technology names has been “exacerbated by weak results from ‘Magnificent Seven’ titans Alphabet Inc and Tesla Inc, and some negative news flow on China tariffs,” Union Bancaire Privee SA managing director Ling Vey-sern (凌煒森) said. “Whether the tech sell-off will continue will depend on key results next week which will see four of the Magnificent Seven stocks report,” such as Apple and Amazon.com Inc.
TSMC shares have now fallen more than 14 percent from their peak. The decline spells trouble for the local financial market given the stock accounts for more than one-third of TAIEX’s weighting.
The change of fortunes for Taiwan’s shares has been swift. Earlier this year, surging interest in AI shares had triggered an unprecedented investment boom. The rally led to retail investors piling into exchange-traded funds, and prompted local regulators to warn over herding behavior.
TSMC’s drop could be due to profit-taking, while “whispers of a potential slowdown in the AI investment boom might also be at play,” Straits Investment Management Pte Ltd chief executive officer Manish Bhargava said. “The wider context of AI momentum can’t be dismissed. The burning question is — is the AI rally running out of steam?”
A TSMC spokesperson said there had been no impact from the typhoon as of Thursday.
Taiwan’s US$2.5 trillion stock market was shut on Wednesday and Thursday as Typhoon Gaemi approached after inundating the Philippines. The last time that Taipei was shut for two days in a row for a typhoon was in 2016.
The New Taiwan dollar gained as much as 0.2 percent against the greenback yesterday, before trading little changed and closing at NT$32.831 per US dollar. Earlier this month, the Taiwanese currency fell to its weakest level since 2016 amid intensified outflows from local equities.
Additional reporting by staff writer
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in