Taiwan shares edge lower, TSMC hit by 3nm delay fears

Taipei, March 30 (CNA) Shares in Taiwan closed lower Monday after plummeting early in the session amid lingering concerns over the economic impact of the spread of the new coronavirus disease (COVID-19), dealers said.

Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in Taiwan's market, came under heavy selling amid fears that trial production of its advanced 3 nanometer process will be postponed by the virus, they said.

The weighted index on the Taiwan Stock Exchange (TWSE), the Taiex, closed down 69.49 points, or 0.72 percent, at 9,629.43, after moving between 9,415.52 and 9,655.70, on turnover of NT$126.23 billion (US$4.18 billion).

The market opened down 1.32 percent as investors reacted to a 4 percent fall in the Dow Jones Industrial Average on Friday following a spike in confirmed COVID-19 cases in the United States. The Taiex then fell to the day's low about 15 minutes later, dealers said.

As the index approached the nearest technical support at around 9,400 points, however, some investors shifted to the buy side, picking up select large cap stocks to limit the downturn, they said.

"Recent volatility on the main board has resulted from panic-led selling amid escalating fears over the virus," Concord Securities analyst Kerry Huang said. "It seems now that shares may be oversold technically, and bargain hunters turned active.

"While foreign institutional investors stayed on the sell side, I think government-led funds were among the bargain hunters that lent support to the broader market," Huang said.

According to the TWSE, foreign institutional investors sold a net NT$4.85 billion in shares Monday, after a net sell of NT$9.72 billion Friday.

TSMC was hit by fears over a possible postponement of trial production of its 3nm process, closing 2.01 percent lower at NT$267.50.

The world's largest contract chipmaker is planning to launch mass production of its 3nm process sometime in 2022, and media reported Monday that installation of production equipment in its 3nm wafer fab in Tainan will be delayed to October from June this year, which will delay its trial production set for 2021.

"The COVID-19 escalation has hit Europe, and [Netherlands-based] ASML Holding, which is TSMC's major production equipment supplier, has been affected by a lockdown. It is understandable that the progress of TSMC's new technology has been affected," Huang said.

TSMC would not comment on the report, saying the company is currently focused on the development of the 5nm process that is scheduled to begin mass production in the first half of this year.

Also in the electronics sector, which ended down 1.04 percent, iPhone assembler Hon Hai Precision Industry Co. lost 0.14 percent to close at NT$70.00, and Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., shed 2.20 percent to end at NT$3,785.00.

Bucking the downturn in the electronics sector, power management solution provider Delta Electronics Inc. rose 1.27 percent to close at NT$119.50.

"Buyers paid more attention today to select old economy blue chips, feeling that many of them have fallen below their fair values," Huang said.

Among them, Hotai Motor Corp. the local sales agent of Japan's Toyota Motor Corp., rose 1.26 percent to close at NT$483.00, Formosa Chemicals & Fibre Corp. rose 0.75 percent to end at NT$80.60, and Formosa Plastics Corp. gained 0.67 percent to close at NT$75.20.

In the financial sector, which ended down 0.78 percent, Fubon Financial Holding Co. fell 1.04 percent to close at NT$37.90, while Cathay Financial Holding Co. ended unchanged at NT$35.80.