TSMC and MediaTek shares fall amid pessimistic outlook
As the index of Taiwan Stock Exchange hit a 21-month low on Monday, shares of blue chips Taiwan Semiconductor Manufacturing Co. (TSMC, ) and MediaTek Inc. ( ) also fell to exceptional lows that have not been seen for a while.
TSMC was down 1.5 percent to finish at NT$124, a record low since October 2014. MediaTek closed 1.8 percent lower at NT$265, the lowest level since July 2012.
Foreign investors placed a net purchase of 1,710,000 TSMC stocks yesterday. Investment trust and security dealers, on the other hand, had a net sell of the stock. In the end, the three professional institutional investors registered a net purchase of 1,265,000 shares.
Foreign investors have confidence in MediaTek as well, and registered a net purchase of 99,000 shares. However, investment trust net sold MediaTeck shares. All in all, the three institutional investors net sold 244,000 shares.
Reasons for TSMC’s Downfall
TSMC’s share took a tumble despite the fact its July consolidated revenues of NT$80.95 billion rose 24.7 percent compared with the same period last year, and surged 35 percent from month.
Some suspect the share declined partly due to the government’s decision to sell off TSMC American depository receipts (ADRs) in an attempt to raise cash.
The fall of TSMC’s weighting by 0.06 percent – the largest downward adjustment – in the MSCI Greater China Index is also believed to wield adverse impact on its share price.
With projected weaker demand and inventory adjustment that may last until the end of the year, the market predicted TSMC will experience slower growth in the third quarter.
MediaTek is likely to have the same faith. Low demand in the hand-held device applications and shrinking 3G phones in emerging markets cash a shadow on the company’s revenue performance in the latter half of 2015. MediaTek predicted mild growth in the third quarter.
On the positive side, New Taiwan dollar’s depreciation is expected to benefit both TSMC and MediaTek.
The U.S. dollar was traded at NT$32.621, marking New Taiwan dollar’s lowest value in around six years. Both of the two semiconductor companies’ revenues are accounted mainly in U.S. dollars.