Taiwan stocks close higher, surpassing 47,000 points; silicon wafer and passive component sectors surge on price hike news

(CNA) The anticipation of TSMC's earnings call has spurred the Taiwan stock market, which surged over a thousand points in early trading today. While the gains narrowed and the market fluctuated, it largely maintained a battle around the 47,000-point mark. In the final trading session, TSMC's stock price rallied, closing at the day's highest point of NT$2,505. This drove the Taiex index to close up 893.08 points at 47,018.99, breaking through the 47,000-point level, with a total turnover of approximately NT$1,301.972 billion.

Among the four major weighted stocks, performance was mixed. TSMC closed up NT$95, or 3.94%, at NT$2,505. MediaTek rose NT$90, or 2.12%, to NT$4,335. Delta Electronics gained NT$40, or 2.05%, to NT$1,990. However, Hon Hai fell NT$3, or 1.2%, to NT$248.

The silicon wafer sector, buoyed by news of price increases, showed strong performance today, with Sino-American Silicon Products Inc., GlobalWafers, Formosa Chemicals & Fibre Corporation, and Etron Technology all hitting their upper trading limits.

The passive component sector also reported price hike news. Leading company Yageo's stock price reached a high of NT$1,220 during trading, setting a new record high since its spin-off. However, it pulled back after reaching the peak, eventually closing flat at NT$1,140. Other stocks in the sector, including Kam Chun, Chilisin Corporation, Huaxin, Walsin Technology, and Lite-On Technology, also saw many individual stocks close at their upper trading limits.

Fubon Securities Investment Trust Chairman Chen Yi-kuang analyzed that the bullish trend of the Taiwan stock market remains unchanged. However, he pointed out three major challenges that may arise in the second half of the year. These include recent reports from well-known AI research firm Semi Analysis, which have successively identified emerging technologies such as memory, CPO (Co-Packaged Optics), and 800VDC power supplies. These technologies may face delays in widespread application due to issues with production capacity, yield rates, and insufficient economic efficiency, leading to corrections in related stock prices and potentially impacting the AI narrative.

Furthermore, Chen Yi-kuang noted that after SpaceX's IPO, it briefly became the world's fifth-largest company by market capitalization. Its massive fundraising scale could create a crowding-out effect on capital. Thirdly, cloud giants are raising hundreds of billions of dollars, which could put pressure on free cash flow and ROI (Return on Investment).

Chen Yi-kuang believes that with cloud giants heavily investing in AI infrastructure, capital expenditures for this year are largely set. This is reflected in the continuous upward revisions of revenue and profits for the AI supply chain in the first half of this year, driving stock prices up. As the second half of the year approaches, investors will begin to scrutinize whether these massive AI investments by cloud giants can be monetized. He believes the market is not bearish on AI itself, but rather on excessive optimism, and investors should remain vigilant. (Editor: Yang Kai-hsiang) 1150701

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