TSMC shares dip below NT$1,000 mark following Trump remarks

Taipei, July 18 (CNA) Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) took a beating, plunging below the NT$1,000 mark (US$30.67) after U.S. Republican presidential candidate Donald Trump claimed Taiwan had taken 100 percent of his country's chip business, dealers said.

The TSMC sell-off also came following a Wall Street Journal report that said the Biden administration was considering plans to tighten semiconductor trade restrictions between the U.S. and China, dealers added.

As of 10:39 a.m., TSMC shares, the most heavily weighted in the local market, had fallen 3.50 percent to NT$994.00. About 48.72 million shares had changed hands.

Led by TSMC, the Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), had lost 542.28 points, or 2.28 percent, to 23,227.54. TSMC's losses contributed about 300 points to the Taiex fall.

Following an almost 8 percent slide of its American depositary receipts (ADRs) on the U.S. markets overnight, TSMC shares in Taipei tumbled by NT$44 or 4.27 percent to an earlier low of NT$986.00 at one point, reducing market capitalization by more than NT$1 trillion.

Update: Taiwan shares end down but off low as TSMC returns to NT$1,000

Negative comments from Trump's interview with Bloomberg Businessweek and possible restrictions from the Biden government on chip sales to China prompted investors at home and abroad to sell off tech stocks amid rising worries over the future outlook of the global semiconductor industry.

On the U.S. markets overnight, the Philadelphia Semiconductor Index moved sharply lower by 6.81 percent. In addition to the heavy losses suffered by TSMC's ADRs, artificial intelligence chip designer Nvidia Corp. and rival Advanced Micro Devices (AMD) plunged by 6.6 percent and 10.2 percent, respectively.

In his interview, Trump said, "I know the people very well and respect them greatly. They (Taiwan) did take about 100 percent of our chip business. I think Taiwan should pay us for defense."

As TSMC shares were hammered, the electronics sub-index trended lower by 3.24 percent and the semiconductor sub-index by 3.59 percent.

Investors have been encouraged to pay attention to remarks made at a TSMC investor conference scheduled for Thursday afternoon. The company is due to detail second quarter results and give guidance for the rest of the year.

TSMC is also expected to respond to Trump's comments and comment on the potential trade restrictions from the Biden administration.

TSMC Q2 results

● TSMC reports highest net profit for Q2

● TSMC overseas expansion plans unchanged despite Trump criticism