Taiwanese tech stocks dip amid political developments

Taiwanese tech stocks fell on Monday following US President Joe Biden’s announcement of his withdrawal from the presidential race, impacting Asia’s chip technology economy.

The Taiex index, which had risen by nearly 28 per cent this year up to July 19, dropped by almost 3.04 per cent at one point.

Taiwan Semiconductor Manufacturing Company (TSMC) and MediaTek, two major players in the chip industry, experienced significant declines in their stock prices, by three per cent and five per cent, respectively.

Taiwan’s United Microelectronics Corp. dipped more than three per cent and ASE Technology Holding also saw their shares decrease by four per cent.

Foxconn’s stock price dropped nearly six per cent to below NT$200 on Monday morning. The company, known for being a key Nvidia AI server maker, had announced a $10 billion investment in a Wisconsin display manufacturing facility in 2018 under former Chairman Terry Gou.

However, the plan was scaled back, and the plant never materialised, drawing criticism from US President Joe Biden.

Elsewhere in Asia, markets in Shanghai, Shenzhen, and Japan saw smaller declines of less than one per cent, while South Korea dipped 1.41 per cent.

Tech stocks in Taiwan and Asia were also affected by comments from former US President Donald Trump, who suggested that Taiwan should pay for US defence protection and claimed the island dominated the chip business.

TSMC confirmed that its investment plans in Arizona remain unchanged and dismissed the idea of joint ventures in the US to address geopolitical risks in response to Trump’s remarks about Taiwan’s chip industry.

Jeff Pu, managing director of tech research at Haitong Securities, explained that the recent decline in tech and chip-related stocks is primarily attributed to Biden’s withdrawal from the race and concerns about geopolitical uncertainties.

Attribution: The Nikkei Asia