Taiwan shares rise as TSMC retreat limits gains

Taipei, Oct. 14 (CNA) Shares in Taiwan closed higher Wednesday but gave up some earlier gains as investors took profits on Taiwan Semiconductor Manufacturing Co. (TSMC) ahead of the chipmaker's investor conference scheduled for Thursday, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark index, ended up 284.52 points, or 0.59 percent, at 48,625.83 after moving between 48,382.64 and 49,059.12. Turnover totaled NT$928.62 billion (US$28.89 billion).

"The index initially rebounded after a plunge (of 1.95 percent) Tuesday, but faced stiff technical resistance after climbing above 49,000 points," Mega International Investment Services analyst Alex Huang said.

"Profit-taking continued toward the end of the session as TSMC came under heavier pressure," Huang said. "Many investors preferred to wait and see what the chipmaker will say at its investor conference."

As a major supplier of chips used in AI applications, TSMC, which accounts for about 40 percent of the market's total value, closed unchanged at NT$2,490.00 after reaching a high of NT$2,535.00. Its retreat from the day's high shaved about 360 points off the Taiex.

"Doubts about the returns on massive investments in AI infrastructure are growing," Huang said. "With valuations of AI-related semiconductor stocks already high, such concerns have discouraged investors from buying."

Adding to the skepticism, Broadcom CEO Hock Tan described some investment flows into the AI sector as "casino gambling" on Monday.

Profit-taking was also seen in other semiconductor stocks. Shares in memory chip supplier Nanya Technology Corp. fell 1.54 percent to NT$480.50, while smartphone IC designer MediaTek Inc. lost 1.10 percent to close at NT$4,475.00. However, IC packaging and testing services provider ASE Technology Holding Co. rose 0.95 percent to NT$747.00.

Outside the semiconductor sector, buying was stronger, dealers said. iPhone assembler and AI server maker Hon Hai Precision Industry Co. gained 1.25 percent to NT$243.00, while power-management solutions provider Lite-On Technology Corp. rose 2.54 percent to NT$283.00.

"The old economy sector attracted more interest as major petrochemical stocks extended their momentum from Tuesday," Huang said.

Following improved third-quarter earnings reports, Formosa Plastics Corp. and Formosa Chemicals & Fibre Corp. both surged 10 percent, the maximum daily increase, to close at NT$88.90 and NT$85.50, respectively, as the petrochemical index rose 6.64 percent. Nan Ya Plastics Corp. jumped 9.40 percent to NT$349.00.

The cement sector gained 1.90 percent as TCC Group Holdings Co. rose 2.66 percent to NT$27.05 after its board approved a plan on Tuesday to list shares of its subsidiary, Cimpor International Holdings, abroad. Asia Cement Corp. ended up 1.36 percent at NT$37.30.

In the mixed financial sector, Fubon Financial Holding Co. rose 0.31 percent to NT$160.50, while Cathay Financial Holding Co. fell 0.44 percent to NT$114.00.

"In addition to TSMC's investor conference, investors should closely watch U.S. inflation data due later in the day, which could move the market," Huang said.

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$20.04 billion worth of shares on the main board Wednesday.