Impact of Exchange Losses on Taiwan's Stock Market: TSMC Affected, Insurance Companies Recover
Table of Contents
You might want to know
- How did the Taiwanese insurance sector recover in June?
- What was the impact of currency fluctuations on TSMC's June revenue?
Main Topic
In the first half of 2025, 14 publicly listed financial holding companies in Taiwan revealed their financial standing. The strong appreciation of the New Taiwan Dollar earlier led to turbulence in the life insurance sector, prompting regulatory intervention. The regulatory authority introduced two temporary measures to alleviate the impact on the insurance industry. As a result, several life insurance holding companies benefited from these measures and the moderating exchange rate, boosting their profits. Collectively, these companies reported a net profit of 638 billion NT dollars for June alone, with first-half earnings totaling 2.192 trillion NT dollars, reflecting a year-over-year decrease of about 35%.
Additionally, Fubon Financial emerged as a leader, clinching the top spots for monthly, cumulative profits, and earnings per share (EPS). Though Fubon's overall growth in the first half was significant, the title of the fastest-growing company went to E.SUN Financial. Other companies like YungFeng Financial, First Financial, and Hua Nan Financial experienced a turnaround with positive growth.
The New Taiwan Dollar surged over 10% against the US Dollar in April and May. This resulted in the rapid depletion of foreign exchange reserves in the insurance sector, leaving a mere 18.8 billion. The regulatory body's quick enactment of emergency measures allowed companies to incorporate these changes by the deadline set for their semi-annual reports, significantly aiding bottom-line recovery. Taiwan's major life insurers posted a combined post-tax profit of 31.2 billion NT dollars for June, while year-to-date profits reached 36 billion NT dollars—a decline of 78% compared to the previous year.
As for TSMC, their June revenue amounted to 263.79 billion NT dollars, witnessing a monthly decline of 17.7% but an annual increase of 26.9%. Despite exchange rate challenges, the robust demand for 3nm and 5nm technologies, along with a shortage of advanced packaging, supported the company's revenue in achieving its target for the quarter.
Nanya Technology, another key player in the DRAM sector, faced significant currency-related challenges. While their sales volume rose by 70% quarter-on-quarter, average DRAM selling prices fell by 4-6%, leading to foreign exchange losses of 1.124 billion NT dollars. This resulted in a broader loss for the second quarter, with a post-tax loss of 4.109 billion NT dollars, marking a 13-year low with an EPS loss of 1.32 NT dollars.
The currency appreciation also severely affected China Steel Corporation, impacting its downstream processing and export sectors, resulting in significant revenue declines. For June, China Steel's revenue stood at 25.54 billion NT dollars, the lowest in five years, dropping by 12.8% month-over-month and 14.7% year-over-year.
Key Insights Table
| Aspect | Description |
|---|---|
| Insurance Sector Recovery | Helped by temporary measures and currency stabilization, June profits rebounded strongly. |
| Impact on TSMC | Despite exchange losses, strong demand for advanced technologies offset some impacts. |
Afterwards...
Looking ahead, Taiwan's industries will need to adapt to ongoing currency fluctuations and global economic trends. Future strategies could involve strengthening financial hedging mechanisms, enhancing product differentiation in the technology sector, and exploring innovative market strategies in insurance and manufacturing industries to mitigate potential currency risks and optimize growth opportunities.