Taiwan’s benchmark stock gauge yesterday entered a bull market as trading resumed after the Lunar New Year holiday, with a broad rebound in chip shares boosting foreign buying in the market. The New Taiwan dollar also strengthened against the US currency.
The benchmark TAIEX rose 560.89 points, or 3.76 percent, to 15,493.82, its best day since May 2021, with turnover totaling NT$329.72 billion (US$10.94 billion). That took TAIEX’s gains from an October low to 22 percent, Taiwan Stock Exchange data showed.
Yesterday’s upturn was led by the bellwether electronics sector, especially large semiconductor stocks. Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest contract chipmaker, and MediaTek Inc (聯發科), the nation’s largest handset chip designer, contributed the most to the index’s advance, closing up 7.95 percent and 6.64 percent respectively.
Photo: CNA
Speculation that the US Federal Reserve is nearing the end of its aggressive interest rate hike cycle along with broad optimism in the region due to China’s reopening after easing its strict COVID-19 controls have spurred a comeback for the tech-heavy market after stocks slid for most of last year.
The TAIEX fell 22.4 percent last year.
Big investors including Warren Buffett are also betting that the worst is over for chipmakers amid attractive valuations and easing tensions between China and the US.
Foreign institutional investors yesterday bought a net NT$72.26 billion of local shares on the main board, the highest amount since Dec. 28, 2005, when they recorded a net purchase of NT$125.28 billion, Taiwan Stock Exchange data showed. Foreign funds have snapped up US$4.6 billion in shares year-to-date, Bloomberg-compiled data showed.
Goldman Sachs Group Inc upgraded Taiwan to “market-weight” from “underweight” on Friday, citing positive trade exposure to China’s reopening, a strong tech cycle recovery in the second half of this year and reduced near-term geopolitical risks as among tailwinds for the market.
However, markets elsewhere in Asia were mixed. In the first trading session after a week-long break, the Shanghai Composite Index added 0.14 percent to 3,269.32 and the Shenzhen Composite Index on China’s second exchange rose 1.16 percent to 2,150.38, but Hong Kong’s Hang Seng lost 2.73 percent to 22,069.73 on heavy selling of technology shares.
Tokyo’s Nikkei 225 rose 0.2 percent to 27,433.40. South Korea’s KOSPI lost 1.3 percent to 2,450.65 and the S&P/ASX 200 in Sydney shed 0.2 percent to 7,481.70, while India’s SENSEX declined 0.4 percent and Bangkok’s SET edged less than 0.1 percent lower.
Meanwhile, the NT dollar advanced to the strongest level since August last year, ending 0.76 percent higher at NT$30.137 versus the greenback yesterday in Taipei trading.
The NT dollar “is playing catchup to gains in regional FX, as markets reopened from a week-long holiday. Sentiments remain conducive with the TAIEX, Philadelphia Semiconductor Index extending gains, while the China reopening story supports growth hopes,” said Christopher Wong (黃經隆), foreign exchange strategist at Oversea-Chinese Banking Corp (華僑銀行) in Singapore.
Additional reporting by AP and staff writer
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to