The TAIEX fell yesterday to complete its worst week in two and a half years. China Airlines (華航) fell on worry that direct links with China may not happen soon with the re-election of President Chen Shui-bian (陳水扁).
Exporters' stocks, such as Taiwan Semiconductor Manufacturing Corp (
The TAIEX shed 24.11, or 0.4 percent, to 6,132.62. More than three stocks declined for every one that gained. For the week, the index dropped 10 percent, its biggest slide since the five days to Sept. 14, 2001.
"Having parliament enabling a recount will help calm Nationalist protesters," said Celine Chiang (江宜津), a fund manager for Polaris International Securities Investment Trust Co (
"Political uncertainty will remain until the election result is affirmed or reversed by recount," she said.
Dealers said the market could rise on Monday if today's pan-blue camp rally is peaceful, and brings the parties closer to a deal, but few expect a quick resolution.
China Airlines, the nation's largest carrier, fell NT$1.20, or 6.2 percent, to NT$18.30. The stock has fallen 29 percent since last Saturday's election.
EVA Airways Corp (長榮) fell for the fifth day, shedding NT$1.10, or 6.4 percent, to NT$16.
TSMC, the world's largest supplier of made- to-order computer chips, rose NT$0.50, or 0.9 percent, to NT$58.50.
Hon Hai Precision, the country's largest electronics manufacturer by sales, rose NT$1.50, or 1.1 percent, to NT$140.
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
MARKET FACTORS: Navitas Semiconductor Inc said that Powerchip is to take over from TSMC as its supplier of high-voltage gallium nitride chips Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday in a statement said that it would phase out its compound semiconductor gallium nitride (GaN) business over the next two years, citing market dynamics. The decision would not affect its financial targets announced previously, the world’s biggest contract chipmaker said. “We are working closely with our customers to ensure a smooth transition and remain committed to meeting their needs during this period,” it said. “Our focus continues to be on delivering sustained value to our partners and the market.” TSMC’s latest move came unexpectedly, as the chipmaker had said in its annual report that it has
Gudeng Precision Industrial Co (家登精密), the sole extreme ultraviolet pod supplier to Taiwan Semiconductor Manufacturing Co (台積電), yesterday said it has trimmed its revenue growth target for this year as US tariffs are likely to depress customer demand and weigh on the whole supply chain. Gudeng’s remarks came after the US on Monday notified 14 countries, including Japan and South Korea, of new tariff rates that are set to take effect on Aug. 1. Taiwan is still negotiating for a rate lower than the 32 percent “reciprocal” tariffs announced by the US in April, which it later postponed to today. The
SECURITY WARNING: The company possesses key 3-nanometer technology, and Taiwan should prevent it from being transferred to China, a lawmaker said The Ministry of Economic Affairs yesterday said it would conduct a “strict review” of any proposed acquisition of Taiwanese tech company Source Photonics Co (索爾思光電), following media reports that a Chinese firm was planning to buy the company in the Hsinchu Science Park (新竹科學園區). Local media reported that Suzhou Dongshan Precision Manufacturing Co (東山精密), China’s largest printed circuit board manufacturer, had announced plans to acquire Source Photonics for 5.9 billion yuan (US$823.1 million). The ministry said it has not received an application from Source Photonics and has formally notified the company that any buyout would constitute a change in its ownership structure. The
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