Taiwan shares end down as Trump signals semiconductor tariffs

Taipei, Aug. 6 (CNA) Shares in Taiwan fell sharply Wednesday, dragged down by semiconductor stocks, after U.S. President Donald Trump said he would announce new tariffs on chips "within the next week or so," dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), closed down 213.23 points, or 0.90 percent, at 23,447.36, after moving between 23,433.53 and 23,557.49. Turnover totaled NT$349.92 billion (US$11.68 billion).

"Trump's remark renewed fears over tariffs on semiconductors, which are a backbone of Taiwan's exports," said Kerry Huang, an analyst at Concord Securities. "Such tariffs are expected to have a more significant negative impact on Taiwan's economy than the 20 percent blanket levy on Taiwanese goods announced last week."

The United States launched a Section 232 investigation in April under the Trade Expansion Act of 1962, paving the way for potential tariffs on semiconductors.

Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, fell 2.17 percent after its American depositary receipts dropped 2.73 percent overnight. The contract chipmaker's decline accounted for roughly 200 points of the Taiex's decline.

In an interview with CNBC, Trump also suggested TSMC could invest US$300 billion in the U.S., nearly double the amount previously pledged. "That added pressure on the chipmaker," Huang said. "But the stock is expected to find strong technical support around the NT$1,100 mark, given its solid fundamentals."

Following TSMC's lead, United Microelectronics Corp., a smaller contract chipmaker, fell 1.69 percent to NT$40.70. Memory chipmaker Nanya Technology Corp. dropped 2.36 percent to NT$43.35, while microcontroller supplier Nuvoton Technology Corp. slumped 6.60 percent to NT$60.90.

iPhone assembler and AI hardware maker Hon Hai Precision Industry Co. rose 0.81 percent to NT$186.00, supported by optimism over its partnership with Teco Electric & Machinery Co., which gained 2.64 percent to NT$54.30. The two companies aim to tap into business opportunities from the US$500 billion Stargate Project, a U.S.-based AI infrastructure initiative.

"Fortunately, buying rotated into select non-tech stocks, which looked undervalued after recent weakness, helping to limit losses on the Taiex," Huang said.

The petrochemical sector rose 1.90 percent. Formosa Chemicals & Fibre Corp. gained 2.69 percent to NT$26.75, Formosa Plastics Corp. added 2.54 percent to NT$38.40, Nan Ya Plastics Corp. rose 1.36 percent to NT$37.30, and Formosa Petrochemical Corp. climbed 1.28 percent to NT$39.50.

The financial sector rose 0.61 percent. CTBC Financial Holding Co. gained 0.70 percent to NT$42.90, Fubon Financial Holding Co. rose 0.48 percent to NT$84.40, while Cathay Financial Holding Co. edged down 0.16 percent to NT$62.70.

"Until the semiconductor tariffs are finalized, the Taiex is likely to remain in consolidation, with caution expected to prevail," Huang said.

According to the TWSE, foreign institutional investors sold a net NT$10.82 billion worth in shares on the main board Wednesday.