The TAIEX remains attractive this quarter and beyond after rallying above the 20,000 points last quarter, as major local firms would benefit further from artificial intelligence (AI) investment by global technology titans, analysts said.
US technology giants Microsoft Corp, Amazon.com Inc, Meta Platforms Inc and Alphabet Inc have increased AI spending, which might total US$175.9 billion this year, a 23 percent gain from a year earlier, Nomura Asset Management Taiwan Ltd (野村投信) said in a note.
The money would ramp up business at all firms on the global AI supply chain, of which Taiwan is an important part and the nation’s significance would not be ignored, Nomura Asset Management Taiwan said.
Photo: CNA
That explained why foreign portfolio managers have increased holdings in local shares by a net NT$160 billion (US$4.99 billion) so far this year, Nomura said.
The fund flows would continue, even though local shares have grown increasingly expensive with the price-to-earnings ratio rising above the five-year average of 18, it said, attributing its confidence to the expectation that corporate earnings would rise 30 percent this year.
In particular, Taiwanese semiconductor firms command global leadership positions in technology processes, enabling them to take part in the supply of cloud computing and AI services, two megatrends of the foreseeable future, Nomura said.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest advanced chipmaker, on April 18 is to report its first-quarter financial situation and give guidance on its business prospects.
TSMC yesterday said it would stick to its financial forecast for the whole year of this year, as most of its manufacturing equipment has resumed operations.
The world’s biggest contract chipmaker said in January that revenue this year would grow by at a low-to-mid-20s percentage from last year in US dollar.
Nomura said that demand for AI chips would exceed supply this year and the imbalance would continue into next year.
The TAIEX would receive additional support later this month and in May from the advent of new funds targeting local shares highlighting growth momentum and high dividends, analysts said.
Mega Investment Trust Corp (兆豐投信), Fuh Hwa Securities Investment Trust Co (復華投信) and Nomura Asset Management Taiwan are to raise money later this month in an apparent bid to copy the successful models of exchange-traded funds.
The cash would boost prices of component shares, which is what happened last month, with more than NT$200 billion poured into shares that promised high dividends.
KGI Securities Investment Trust Co (凱基投信), Taishin Investment Trust Co (台新投信) and Shin Kong Investment Trust Co (新光投信) are waiting for regulatory approval to launch similar products, which are a fast-growing source of fee income.
Hon Hai Precision Industry Co (鴻海精密) yesterday said that its research institute has launched its first advanced artificial intelligence (AI) large language model (LLM) using traditional Chinese, with technology assistance from Nvidia Corp. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), said the LLM, FoxBrain, is expected to improve its data analysis capabilities for smart manufacturing, and electric vehicle and smart city development. An LLM is a type of AI trained on vast amounts of text data and uses deep learning techniques, particularly neural networks, to process and generate language. They are essential for building and improving AI-powered servers. Nvidia provided assistance
STILL HOPEFUL: Delayed payment of NT$5.35 billion from an Indian server client sent its earnings plunging last year, but the firm expects a gradual pickup ahead Asustek Computer Inc (華碩), the world’s No. 5 PC vendor, yesterday reported an 87 percent slump in net profit for last year, dragged by a massive overdue payment from an Indian cloud service provider. The Indian customer has delayed payment totaling NT$5.35 billion (US$162.7 million), Asustek chief financial officer Nick Wu (吳長榮) told an online earnings conference. Asustek shipped servers to India between April and June last year. The customer told Asustek that it is launching multiple fundraising projects and expected to repay the debt in the short term, Wu said. The Indian customer accounted for less than 10 percent to Asustek’s
‘DECENT RESULTS’: The company said it is confident thanks to an improving world economy and uptakes in new wireless and AI technologies, despite US uncertainty Pegatron Corp (和碩) yesterday said it plans to build a new server manufacturing factory in the US this year to address US President Donald Trump’s new tariff policy. That would be the second server production base for Pegatron in addition to the existing facilities in Taoyuan, the iPhone assembler said. Servers are one of the new businesses Pegatron has explored in recent years to develop a more balanced product lineup. “We aim to provide our services from a location in the vicinity of our customers,” Pegatron president and chief executive officer Gary Cheng (鄭光治) told an online earnings conference yesterday. “We
LEAK SOURCE? There would be concern over the possibility of tech leaks if TSMC were to form a joint venture to operate Intel’s factories, an analyst said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday stayed mum after a report said that the chipmaker has pitched chip designers Nvidia Corp, Advanced Micro Devices Inc and Broadcom Inc about taking a stake in a joint venture to operate Intel Corp’s factories. Industry sources told the Central News Agency (CNA) that the possibility of TSMC proposing to operate Intel’s wafer fabs is low, as the Taiwanese chipmaker has always focused on its core business. There is also concern over possible technology leaks if TSMC were to form a joint venture to operate Intel’s factories, Concord Securities Co (康和證券) analyst Kerry Huang (黃志祺)
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