Taiwan shares lose earlier gains as TSMC comes under pressure

Taipei, May 8 (CNA) Shares in Taiwan saw earlier gains erased to close little changed Thursday as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) suffered last-ditch selling amid lingering concerns over the possibility of tariffs threatened by U.S. President Donald Trump, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 3.09 points, or 0.02 percent, at the day's low of 20,543.40 after coming off a high of 20,747.28. Turnover totaled NT$248.19 billion (US$8.2 billion).

After the index rose more than 200 points to the day's high in the morning session, profit taking set in and escalated in late trading with large-cap semiconductors, in particular TSMC, in focus to erase the main board's earlier gains by the end of the session, dealers said.

"The initial gains reflected Trump's plan to end chip export restrictions under the Biden administration, which boosted Nvidia Corp. shares (by 3.10 percent) overnight," Concord Securities analyst Kerry Huang said, referring to Biden's "AI diffusion" rule, which had been scheduled to come into effect on May 15, removing a set of artificial intelligence chip controls.

"However, caution about Trump's tariffs on semiconductors remain, prompting investors to lock in profits with TSMC as their major target," Huang said. Trump has threatened to slap a tariff of as much as 100 percent on semiconductors from Taiwan.

TSMC, the most heavily weighted local stock, fell 1.08 percent to close at the day's low of NT$918.00, off a high of NT$939.00. The stock's fall from the day's high cost the Taiex about 170 points.

United Microelectronics Corp., a smaller contract chipmaker, also lost 0.98 percent to end at NT$45.30, while smartphone IC designer MediaTek Inc. rose 1.18 percent to close at NT$1,290.00, although its gains fell in the late session. In addition, memory chip supplier Nanya Technology Corp. added 0.87 percent to end at NT$34.95, but came off a high of NT$36.30.

Also in the tech sector, iPhone assembler and AI maker Hon Hai Precision Industry Co. rose 0.69 percent to close at NT$146.00, while Quanta Computer Inc., another AI server supplier, lost 0.98 percent to end at NT$251.50.

Non-tech stocks largely moved in weakness with Formosa Plastics Corp. down 2.86 percent to close at NT$35.65 and Nan Ya Plastics Corp. falling 2.67 percent to end at NT$30.95. In addition, Shihlin Paper Corp. shed 1.93 percent to close at NT$50.18 but Longchen Paper & Packaging Co. added 0.21 percent to end at NT$9.48.

So-called "military concept stocks continued to attract rotational buying as aircraft maintenance services provider Air Asia Co. soared 10 percent, the maximum daily increase, to close at NT$43.80 and Lungteh Shipbuilding Co. rose 0.97 percent to end at NT$104.50.

In the mixed financial sector, Cathay Financial Holding Co. lost 1.78 percent to close at NT$52.20, while Fubon Financial Holding Co. ended up 0.13 percent at NT$78.10.

"As long as uncertainties from Trump's semiconductor tariff threats stay in place, the local tech sector is expected to move in consolidation mode and so is the broader market," Huang said. "Investors had better stay on the sidelines for now."

According to the TWSE, foreign institutional investors bought a net NT$1.48 billion worth of shares on the main board Thursday.