Shares in Taiwan yesterday rose as the de-escalation of trade tensions between the US and China provided immediate relief to the nation’s major contract electronics manufacturers, many of which have substantial production capacities in China.
The TAIEX closed up 200.6 points, or 0.95 percent, at 21,330.14, catching up with big advances on Wall Street overnight, where the tech-heavy NASDAQ Composite rose more than 4 percent, the S&P 500 jumped 3.3 percent and the Dow Jones Industrial Average increased 2.8 percent.
“The US-China significant tariff cut was encouraging, so US markets jumped overnight and the Taipei market just followed today,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang (黃國偉) said.
Photo: CNA
The bellwether electronics sector led the upturn throughout the session, rising 1.17 percent after shares in contract chipmaker Taiwan Semiconductor Manufacturing Co (台積電) rose 1.25 percent to close at NT$969, Huang added.
“The upcoming Computex Taipei prompted investors to pick up artificial intelligence [AI] related tech stocks on hopes of positive leads from the annual tech exhibition,” he said.
Shares of Hon Hai Precision Industry Co (鴻海), a supplier of AI servers and an assembler of Apple Inc’s iPhones, rallied 3.27 percent to NT$158, Taiwan Stock Exchange data showed.
Hon Hai stands to benefit the most from the US-China trade truce as about 75 percent of its production facilities are in China, dealers said.
The company relies heavily on its Chinese production bases despite ongoing diversification efforts. Its facility in Zhengzhou, China, remains the world’s largest iPhone manufacturing site, while the Shenzhen plant is a hub for iPhone research and development and pilot production.
With US-China tariffs reduced to 30 percent and 10 percent from the previous 145 percent and 125 percent respectively, pressure on the Apple supply chain and notebook production lines has been substantially subdued, dealers said.
Other electronics suppliers including Quanta Computer Inc (廣達電腦), Inventec Corp (英業達), Wistron Corp (緯創), Pegatron Corp (和碩) and Compal Electronics Inc (仁寶) also stand to gain from reduced tariff pressures, they added.
Compal’s Chinese factories — in Kunshan, Nanjing, Chongqing and Chengdu — accounted for 70 percent of its total output last year. Quanta has major notebook production sites in Chongqing and Shanghai, while Inventec operates plants in Shanghai, Chongqing and Nanjing, focusing on servers, automotive electronics and laptops.
Pegatron, with about 70 percent of its total production in China, manufactures automotive products and handles some consumer electronics assembly in Suzhou, while Wistron’s Chinese operations account for less than 50 percent of its total output, as the company diversifies globally.
UBS Group said it has preferences in Taiwan’s supply chain compared with their Chinese peers, as firms in the AI supply chain are better off and more insulated from the tariff tensions.
A better tariff outcome would broaden the tech portfolio somewhat with smartphones already discounting a challenging outcome, UBS head of Taiwan research Randy Abrams said in a note.
Taiwan’s rapidly aging population is fueling a sharp increase in homes occupied solely by elderly people, a trend that is reshaping the nation’s housing market and social fabric, real-estate brokers said yesterday. About 850,000 residences were occupied by elderly people in the first quarter, including 655,000 that housed only one resident, the Ministry of the Interior said. The figures have nearly doubled from a decade earlier, Great Home Realty Co (大家房屋) said, as people aged 65 and older now make up 20.8 percent of the population. “The so-called silver tsunami represents more than just a demographic shift — it could fundamentally redefine the
The US government on Wednesday sanctioned more than two dozen companies in China, Turkey and the United Arab Emirates, including offshoots of a US chip firm, accusing the businesses of providing illicit support to Iran’s military or proxies. The US Department of Commerce included two subsidiaries of US-based chip distributor Arrow Electronics Inc (艾睿電子) on its so-called entity list published on the federal register for facilitating purchases by Iran’s proxies of US tech. Arrow spokesman John Hourigan said that the subsidiaries have been operating in full compliance with US export control regulations and his company is discussing with the US Bureau of
Businesses across the global semiconductor supply chain are bracing themselves for disruptions from an escalating trade war, after China imposed curbs on rare earth mineral exports and the US responded with additional tariffs and restrictions on software sales to the Asian nation. China’s restrictions, the most targeted move yet to limit supplies of rare earth materials, represent the first major attempt by Beijing to exercise long-arm jurisdiction over foreign companies to target the semiconductor industry, threatening to stall the chips powering the artificial intelligence (AI) boom. They prompted US President Donald Trump on Friday to announce that he would impose an additional
China Airlines Ltd (CAL, 中華航空) said it expects peak season effects in the fourth quarter to continue to boost demand for passenger flights and cargo services, after reporting its second-highest-ever September sales on Monday. The carrier said it posted NT$15.88 billion (US$517 million) in consolidated sales last month, trailing only September last year’s NT$16.01 billion. Last month, CAL generated NT$8.77 billion from its passenger flights and NT$5.37 billion from cargo services, it said. In the first nine months of this year, the carrier posted NT$154.93 billion in cumulative sales, up 2.62 percent from a year earlier, marking the second-highest level for the January-September
RSS