US Chip Stocks Fall, TSMC ADR Rises; Analysts Expect Taiwan Stocks to Consolidate at Highs

Markets are anticipating a potential agreement between the US and Iran. The Dow Jones Industrial Average closed at a record high, and the S&P 500 index ended higher. However, the Philadelphia Semiconductor Index fell 2.15%, dragged down by chip stocks. TSMC's US-listed ADR bucked the trend, rising 1.88%. Taiwan stock index futures rose 32 points in after-hours trading to 46,342 points, and TSMC futures rose 15 points to 2,425 points.

Looking ahead, futures analysts noted that while the Taiwan stock market pulled back at the end of trading on the 4th, the short-term trend structure remains intact. Market liquidity is sufficient, and the US stock market has not shown signs of a reversal. The Taiwan stock market is expected to maintain a high-level consolidation pattern in the short term. Future focus will be on the US Federal Reserve's interest rate decision, the direction of the US dollar, and the trend of US Treasury yields.

The Dow was driven by healthcare and financial stocks, hitting a new record high. The Dow Jones Industrial Average rose 874.86 points, or 1.73%, to close at 51,561.93. The S&P 500 index rose 30.63 points, or 0.41%, to 7,584.31.

The Nasdaq Composite Index fell 23.01 points, or 0.09%, to 26,830.96. The Philadelphia Semiconductor Index fell 299.46 points, or 2.15%, to 13,617.50.

NVIDIA rebounded, rising 1.82% to close at $218.66. TSMC's ADR rose 1.88% to $444.92. Broadcom's revenue outlook fell short of expectations, and its stock fell 12.59% to close at $418.91. Memory chip giant Micron Technology fell 7.74% to $996, falling below the $1,000 mark.

AMD fell 3.56% to $523.2, Arm fell 4.47% to $393.44, and ASE Technology Holding's ADR fell 3.78%.

Taiwan's benchmark Taiex index fell at the end of trading on the 4th, closing down 781.7 points at 45,677.46, losing the 46,000-point mark. Trading value was NT$1.325597 trillion. The three major institutional investors (foreign investors, investment trusts, and dealers) recorded a combined net sell of NT$93.157 billion. Dealers net sold NT$21.366 billion, investment trusts net bought NT$3.894 billion, and foreign and Chinese investors net sold NT$75.685 billion, ending a four-day buying streak.

In terms of TAIEX futures positions, the net short position of the three major institutional investors increased by 1,405 contracts to 14,399 contracts on the 4th. Among them, foreign investors' net short position increased by 2,704 contracts to 69,476 contracts, a record high.

TSMC held its shareholder meeting on the 4th. Chairman and CEO CC Wei stated that TSMC continues to increase production in both the US and Taiwan, and Taiwan will remain TSMC's largest production base. He said that competitors trying to catch up with TSMC are "dreaming," adding that Taiwan has a significant advantage in the AI industry, making it difficult for other countries to compete.

Wei noted that TSMC's stock price has grown more than 1.5 times over the past year, and cash dividends to shareholders have grown by more than 30%. He expressed strong confidence in TSMC's growth over the next few years. (Editor: Chang Chun-mao) 1150605