Taiwan shares end down as memory chip suppliers face sell-off

Taipei, June 23 (CNA) Shares in Taiwan closed lower Tuesday with semiconductor stocks especially memory chip suppliers under heavy pressure as investors rushed to pocket their gains built in recent sessions, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark index, ended down 640.86 points, or 1.34 percent, at the day's low of 47,100.65 after hitting a historical intraday high of 48,218.87. Turnover totaled NT$1.60 trillion (US$50.22 billion).

"After the index breached the 48,000-point mark, selling followed," Mega International Investment Services analyst Alex Huang said. "Memory chip suppliers fell victim to the sell-off after shares of their counterparts in Seoul plunged."

"Tech stocks at home and abroad had been given significant boosts by the AI investment frenzy and investors decided to reconsider their valuations," Huang said.

As South Korea's two memory chip powerhouses Samsung Electronics and SK Hynix dipped over 12 percent, Taiwan's Nanya Technology Corp. plunged 10 percent, the maximum daily decline, to close at NT$454.00, while Macronix International Co. lost 7.28 percent to end at NT$172.00.

Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which accounts for over 40 percent of the Taiwan's exchange's total market value, fell 0.80 percent to close at NT$2,490.00, pulled down by last ditch selling.

Bucking the downturn, United Microelectronics Corp., a smaller contract chipmaker, extended its momentum from Monday, rising 6.25 percent to end at NT$170.00 on rumors that it will work with Intel to develop the 3-nanometer process.

In addition, smartphone IC designer MediaTek Inc. closed up 1.57 percent at NT$4,535.00.

Huang said downstream hardware assemblers also came under pressure due to their relatively low gross margins.

AI server maker and iPhone assembler Hon Hai Precision Industry Co. fell 3.35 percent to end at NT$259.50, and Quanta Computer Inc., another AI server supplier, dropped 1.97 percent to close at NT$372.50.

In the old economy sector, which largely moved lower in line with the Taiex, Formosa Plastics Corp. and Formosa Chemicals & Fibre Corp. fell 5.44 percent and 5.52 percent, respectively, to end at NT$49.55 and NT$53.10.

Despite the heavy losses suffered by Nanya Technology, parent Nan Ya Plastics Corp. rose 1.31 percent to close at NT$154.50.

Among other industrial stocks, Shihlin Paper Corp. fell 1.46 percent to end at NT$47.35, and rival Cheng Loong Corp. shed 3.77 percent to close at NT$21.70.

The financial sector appeared resilient, gaining 0.36 percent. CTBC Financial Holding Co. rose 2.70 percent to end at NT$72.40, and Cathay Financial Holding Co. gained 0.44 percent to close at NT$113.50.

"In addition to technical factors, I suspect investors also feared a possible rate hike by the U.S. Federal Reserve, which struck a hawkish tone at its most recent policymaking meeting last week," Huang said.

"It is time for investors to trim holdings and keep more cash on hand now," Huang said.

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$38.58 billion in shares on the market Tuesday.