Taipei: Shares in Taiwan experienced a significant downturn on Wednesday, particularly affecting semiconductor stocks, following a statement from U.S. President Donald Trump regarding the potential announcement of new tariffs on chips in the near future.
According to Focus Taiwan, the Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), saw a decrease of 213.23 points, or 0.90 percent, closing at 23,447.36. The index fluctuated between 23,433.53 and 23,557.49 throughout the day, with a total turnover amounting to NT$349.92 billion (US$11.68 billion).
Kerry Huang, an analyst at Concord Securities, expressed that Trump’s remarks have rekindled apprehensions about semiconductor tariffs, which are crucial to Taiwan’s export economy. These tariffs could potentially have a more severe adverse impact on Taiwan’s economy compared to the 20 percent blanket levy on Taiwanese goods announced last week.
The backdrop to these developments is the United States’ initiation of a Section 232 investigation in April under the Trade Expansion Act of 1962, which could lead to tariffs being imposed on semiconductors.
Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, experienced a 2.17 percent drop after its American depositary receipts fell 2.73 percent overnight. This decline in TSMC significantly contributed to the overall decrease in the Taiex. In an interview with CNBC, Trump also suggested that TSMC might invest US$300 billion in the U.S., nearly doubling the previously pledged amount, adding pressure on the chipmaker. Despite this, Huang noted that TSMC’s stock is expected to find strong technical support around the NT$1,100 mark due to its solid fundamentals.
Other semiconductor stocks followed TSMC’s lead, with United Microelectronics Corp. dropping 1.69 percent to NT$40.70, Nanya Technology Corp. decreasing 2.36 percent to NT$43.35, and Nuvoton Technology Corp. falling 6.60 percent to NT$60.90.
Conversely, iPhone assembler and AI hardware maker Hon Hai Precision Industry Co. saw a rise of 0.81 percent to NT$186.00, buoyed by optimism surrounding its partnership with Teco Electric and Machinery Co., which increased 2.64 percent to NT$54.30. The collaboration aims to capitalize on the US$500 billion Stargate Project, a U.S.-based AI infrastructure initiative.
Despite the downward trend in semiconductor stocks, buying rotated into select undervalued non-tech stocks, which helped mitigate losses on the Taiex. The petrochemical sector rose by 1.90 percent, with Formosa Chemicals and Fibre Corp. gaining 2.69 percent to NT$26.75, Formosa Plastics Corp. adding 2.54 percent to NT$38.40, Nan Ya Plastics Corp. rising 1.36 percent to NT$37.30, and Formosa Petrochemical Corp. climbing 1.28 percent to NT$39.50.
The financial sector also saw a rise of 0.61 percent, with CTBC Financial Holding Co. gaining 0.70 percent to NT$42.90 and Fubon Financial Holding Co. increasing 0.48 percent to NT$84.40, though Cathay Financial Holding Co. edged down 0.16 percent to NT$62.70.
Huang anticipates that until the semiconductor tariffs are finalized, the Taiex is likely to remain in consolidation, with caution expected to prevail among investors.
According to TWSE, foreign institutional investors sold a net NT$10.82 billion worth of shares on the main board Wednesday.