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TSMC shares up on 3nm fab plan; high tech sector follows

2017/09/30 12:35

Taipei, Sept. 30 (CNA) Shares of Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) moved higher in the morning session Saturday after the world's largest contract chip maker announced a day earlier plans to build a sophisticated 3 nanometer fab in southern Taiwan's Tainan Science Park, dealers said.

Led by the gains posted by TSMC, the most heavily weighted stock in the local market, the bellwether electronics sector followed suit, serving as a driver to the upturn in the broader market, they said.

As of 10:54 a.m., shares of TSMC had added 0.69 percent to reach NT$218.00 (US$7.17) per share, with 2 million shares changing hands on the Taiwan Stock Exchange, where the weighted index was up 0.55 percent at 10,386.49 points. The electronics sector was up 0.84 percent.

TSMC's stock attracted buying soon after the local main board opened in the wake of the important investment project announcement, and strength continued but was capped as many foreign institutional investors were away from the trading floor for the weekend, Hua Nan Securities analyst Kevin Su said.

Taiwan is the only equity market in the world to operate on Sept. 30, a make-up work day for a lost trading session during the upcoming Oct. 10 National Day holiday.

"Foreign institutional investors are the largest shareholder of TSMC. A lack of their presence on Saturday, the stock's fluctuations have been limited," Su said. "But its share price still is moving higher due to the investment plan announcement."

In a statement released on Friday, TSMC said that it has chosen the Tainan Science Park as the site of its planned fab applying advanced 3 nm process.

The facility is the world's first-announced investment in the 3nm process. While the total investment amount was not immediately revealed, the local media said that the project could hit NT$500 billion (US$16.45 billion) to become the largest investment in Taiwan.

"TSMC's 3nm plant is necessary for the chip maker to maintain the lead over its peers at a time when U.S.-based Intel Corp. is gearing up to enter the pure wafer foundry business," Su said. "Investors have been encouraged to buy into the stock amid optimism toward its outlook."

Currently, TSMC takes a more than 50 percent share in the global pure foundry industry, leaving its competitors far behind.

"More importantly, TSMC's strength also spread to other integrated circuit stocks in its supply chain on hopes that the investment will benefit them," Su said.

Among the gaining IC stocks, semiconductor production equipment suppliers United Integrated Services Co. (漢唐) had risen 1.36 percent to NT$52.00, and Foxsemicon Integrated Technology Inc. (京鼎) had added 2.95 percent to NT$209.50 as of 10:54 a.m.

In its statement, TSMC said that the investment is expected to "leverage the company's existing cluster advantage and the benefit of a comprehensive supply chain."

The semiconductor sub-index was up 0.63 percent.

Su said the higher semiconductor sector in Taiwan also reflected a 0.86 percent increase posed by the Philadelphia Semiconductor Index in the U.S. market overnight.

(By Jackson Chang and Frances Huang)Enditem/cs