The TAIEX yesterday broke a three-decade record, helped by the biggest surge in years for the economy’s biggest stock.
The TAIEX closed 2.31 percent higher at 12,588.3 points as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) soared by the 10 percent daily limit.
With the strong showing of TSMC, the TAIEX breached its record intraday high of 12,682 recorded on Feb. 12, 1990, before giving up part of its earlier gains.
Photo: CNA
Turnover was NT$252.4 billion (US$8.59 billion) on the main board, with foreign institutional investors buying a net NT$7.24 billion in shares, Taiwan Stock Exchange data showed.
The US$35 billion addition to its market capitalization makes TSMC the 12th-most valuable stock worldwide, ahead of US retail giant Walmart Inc.
The chipmaker for the likes of Apple Inc wields so much influence over the 921-member stock benchmark that without it, the TAIEX would be down about 2 percent this year versus its 5 percent gain.
Photo: CNA
The latest boost to TSMC’s shares, which were already up 17 percent for the year before yesterday, came after Intel Corp last week said that its 7-nanometer chips are behind schedule and it might outsource their production.
The US chipmaker is expected to funnel new business to TSMC, given its global lead in silicon fabrication and track record making semiconductors for the world’s largest tech corporations.
TSMC’s US$160 billion-plus rally since March follows a global tech resurgence and has resuscitated Taiwan’s stock market.
Like Japan, Taiwan saw a bubble in its equities burst three decades ago, and it has been a long climb back.
However, with a global rush into tech shares pushing the NASDAQ Composite Index to a record this month, overseas investors sent more than US$850 million into Taiwan’s tech-heavy stock market.
That is the largest net inflow among Asian markets tracked by Bloomberg, with most of Taiwan’s likely going into TSMC.
It makes up almost one-third of the weighted TAIEX.
The inflows have also helped push the New Taiwan dollar to the strongest level versus the US dollar since 2018.
A report yesterday suggested that Intel had placed orders with TSMC for 180,000 units of 6-nanometer chips for next year.
Meanwhile, brokerages, including Nomura Holdings Inc and Credit Suisse Group AG, upgraded TSMC to the equivalent of “buy.”
Aletheia Capital did as well, with analysts Stefan Chang (張玄志) and Warren Lau (劉華仁) writing in a note that TSMC “will capture a sizable share” of Intel business.
That “could lead to TSMC raising its current long-term growth of 5-10 percent,” they said. “Such a structural shift in industry dynamics outweighs our previous concerns.”
Local stocks have proved resilient to the COVID-19 pandemic and China-US disputes this year.
Listed companies saw sales rise 6 percent last month from a year earlier, the strongest growth since October 2018, the stock exchange said on July 13.
Additional reporting by CNA
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