Taiwan shares fall; tech stocks hit by Nvidia's caution on China ban ...

Taipei, Nov. 22 (CNA) Shares in Taiwan moved lower Wednesday, pulled down by artificial intelligence-related stocks after a warning from AI chip designer Nvidia Corp. on the possible impact of the U.S. government's ban on chip sales to China, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark weighted index, ended down 106.44 points, or 0.61 percent, at 17,310.26 after moving between 17,264.95 and 17,344.53. Turnover totaled NT$283.70 billion (US$9.04 billion).

The market opened down 0.52 percent in a knee-jerk reaction to a 1.92 percent fall in the Philadelphia Semiconductor Index overnight on the concerns of Nvidia, which saw its shares fall 0.92 percent despite a strong earnings report, dealers said.

Selling in Taiwan focused on AI-related and semiconductor stocks, including contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which counts Nvidia as one of its major clients, dealers added.

"Although Nvidia posted better than expected earnings (for the three months to October), investors shifted their attention to its warning on the possible impact of the Biden administration's ban on chip sales to China," Moore Securities Investment Consulting Co. analyst Adam Lin said.

Nvidia, which beat expectations with earnings per share of US$4.02 in its fiscal third quarter (ending in October), warned at an investor conference Tuesday that its sales could take a sharp hit from the U.S. government's move to block sales of its high-performance AI chips to China.

"So downward pressure was evident after the local market opened today following a plunge in the Philadelphia Semiconductor Index overnight," Lin said. "TSMC came under heavy pressure and was one of the drivers of the broader market's losses."

TSMC fell 1.37 percent to close at NT$577.00. Its losses helped push the electronics index and semiconductor sub-index lower by 0.80 percent and 0.76 percent, respectively, and contributed about 65 points to the Taiex's fall.

The silver lining was that IC designers were boosted by rotational buying, led by smartphone IC designer MediaTek Inc. It gained 1.73 percent to end at NT$942.00 after foreign brokerages raised target prices on the stock.

Buying also spread to other IC designers.

Global Unichip Corp., TSMC's application specific integrated circuit (ASIC) design subsidiary, gained 2.59 percent to close at NT$1,785.00, and system-on-chip (SoC) designer Andes Technology Corp. soared 10 percent, the maximum daily increase, to end at NT$512.00.

"Several major AI server suppliers also got hit by the Nvidia warning, adding downward pressure to the Taiex," Lin said, referring to Quanta Computer Inc., which lost 4.14 percent to close at NT$208.50.

Meanwhile, Wistron Corp., another AI server maker, fell 4.78 percent to end at NT$97.60, and Wiwynn Corp, Wistron's cloud application subsidiary dropped 2.41 percent to close at NT$1,825.00.

In addition, LITE-ON Technology Corp., a maker of power management solutions for AI server use, shed 4.46 percent to end at NT$107.00.

Lin said old economy stocks also generally moved lower in line with the broader market.

The transportation industry, which gave up early gains, fell 0.62 percent.

Evergreen Marine Corp., the largest container cargo shipper in Taiwan, lost 1.32 percent to close at NT$112.0, and rivals Yang Ming Marine Transport Corp. fell 0.84 percent and 1.93 percent, respectively, to end at NT$41.55 and NT$45.65.

But the steel industry benefited from last ditch buying, and rose 0.36 percent.

China Steel Corp., the largest steel maker in Taiwan, gained 0.39 percent to close at NT$25.80, and Tung Ho Steel Corp. gained 2.06 percent to end at NT$69.30.

Elsewhere in the old economy sector, Nan Ya Plastics Corp. lost 1.58 percent to close at NT$68.50, and Formosa Chemicals & Fibre Corp. ended down 0.77 percent at NT$64.50.

In the financial sector, which lost 0.29 percent, Cathay Financial Holding Corp. rose 0.33 percent to close at NT$46.30, and Fubon Financial Holding Co. ended down 0.46 percent at NT$64.60.

"The Taiex moved lower as the Taiwan dollar's recent appreciation came to a halt after the Federal Reserve's meeting minutes led foreign institutional investors to retreat from their recent buying," Lin said.

The minutes from the Oct. 31-Nov. 1 meeting were perceived as hawkish, indicating that the Fed's policy needed to remain "restrictive" amid concerns that inflation could be stubborn or tick higher.

"But, compared with the market's recent strong showing, today's losses were not intolerable at all, as the market has seen strong technical support at around the five-day moving average of 17,250 points," Lin said.

The Taiex had risen 8.85 percent so far this month before Wednesday.

According to the TWSE, foreign institutional investors sold a net NT$7.40 billion in shares on the market Wednesday.