Highlights

On May 14, Taiwan's stock market experienced a notable surge, led by TSMC, driven by tariff reductions between the US and China and the lifting of AI chip restrictions by the US, which triggered a strong opening. Foreign investments continue with significant TSMC support, aiming for the thousand-dollar mark. Foxconn and Quanta have reported positive quarterly results, and HTC has sold its Taoyuan real estate to Pegatron, reflecting strategic asset optimization.

Sentiment Analysis

• The sentiment surrounding Taiwan's stock market is largely positive, fueled by strong performances from key players like TSMC and positive market conditions.
• Market reactions to foreign investment and tariff changes are optimistic, with predictions of continued growth.
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Article Text

The Taiwan stock market opened strongly on May 14, boosted by the reduction in US-China tariffs and the lifting of restrictions on AI chips by the US, which set the stage for Taiwan Semiconductor Manufacturing Company (TSMC) to lead the charge. The market closed with a significant increase of 452.87 points or 2.12%, reaching 21782.87 points at its peak, with trading volume surging to NT$409.33 billion. Foreign investors contributed an additional NT$44.715 billion, marking the second highest record of the year, leading to a collective purchase favoring major shipping companies and targeting TSMC, which nears the thousand-dollar threshold. Concurrently, Foxconn and Quanta are reported to have hosted positive results in their recent earnings announcements.

Quanta has highlighted an upsurge in server orders, projecting that AI server revenue is set to account for 70% of total server revenues in the future as it ramps up shipments of NVIDIA GB200 units starting Q2. Foxconn adjusted its revenue forecast due to exchange rate fluctuations, predicting a downgrade from robust to significant growth, with internal estimates indicating that each New Taiwan dollar appreciation against the US dollar reduces revenue by 3% and decreases the gross margin by 0.1 percentage points.

China Steel opened its June pricing, adjusting the rates amidst the drastic appreciation of the New Taiwan dollar, impacting downstream processing export sectors. This move is aimed at bolstering competitiveness, with prices per metric ton reduced by NT$600. The real estate sector also saw movement, with HTC selling its Taoyuan property to Pegatron for over NT$5.6 billion, effectively realizing proceeds of around NT$3.9 billion, a strategic decision linked to asset activation with no impact on its manufacturing capabilities.

Moreover, Chang Hwa Commercial Bank's annual report hints at significant shareholder structure changes as major foreign asset managers Singapore's GIC and Norway's Norges Bank, along with Fubon Life, move out of the top ten shareholders, replaced by three high-dividend ETFs. These changes highlight a dynamic shift towards diverse investment strategies within the market, providing opportunities for growth and investment gain.

Key Insights Table