Shares of TSMC drop below NT$100 mark as investors pocket gains


CNA

TAIPEI — Shares of Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chip-maker, fell below the NT$100.00 (US$3.36) mark Wednesday as foreign investors locked in recent gains, dealers said.

TSMC shares closed down 1.20 percent to close at NT$98.80 with 61.63 million shares changing hands. The benchmark weighted index ended down 0.51 percent at 7,798.03 points.

It was the first time the stock had closed below that level since Jan. 28, when it finished at NT$99.30.

Some market analysts said the selling was because many investors had concerns over rising competition from TSMC’s major rivals, such as Samsung Electronics Corp. and GlobalFoundries Inc.

They said these rivals have been gearing up for a larger market share by competing with TSMC for orders.

Amid such concerns, foreign institutional investors served as net sellers of about 63.28 million TSMC shares in the past four trading sessions. After the sell-off, foreign investors owned a 77.98 percent stake in TSMC as of Tuesday, down from 78.20 percent recorded March 14.

However, Ta Ching Securities analyst Andy Hsu said he is not too pessimistic about TSMC’s earnings outlook, although the stock encountered heavy selling in Wednesday’s session.

“TSMC is the most weighted stock in the local bourse. Foreign institutional investors who had raised short positions in the futures market targeted it to drag down the stock for profit in futures,” Hsu said.

He said TSMC remains competitive in the global foundry business as it has taken the lead over its competitors so that it will be hard for its rivals to challenge its competitiveness any time soon.

In 2012, TSMC generated US$17.17 billion in sales, retaining the title as the world’s largest contract chip-maker, far ahead of GlobalFoundries’ US$4.56 billion, Samsung’s US$4.33 billion and United Microelectronics Corp.’s US$3.73 billion, according to IC Insights.

“I prefer to say that the latest losses in share price posted by TSMC were just the result of technical factors after its recent strong showing,” Hsu said.

Hsu said the global IC business is undergoing inventory adjustments in the first quarter of this year and it is expected that the sector will stage a rebound in the second quarter.

“I am not worried about TSMC’s share movement. The stock is still a favorite among foreign institutional investors,” Hsu said.