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Taipei, March 7 (CNA) The market capitalization of contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) plunged below NT$15 trillion (US$53.19 billion) during Monday's morning session as the stock came under heavy pressure amid rising concerns about the military conflict between Russia and Ukraine.
As of 11:50 a.m., the share price of TSMC, the most heavily weighted stock in the local market, had shed NT$19.00 or 3.19 percent to fall to NT$596.00 on the Taiwan Stock Exchange (TWSE), whose benchmark Taiex tumbled by 555.24 points or 3.13 percent to 17,181.28.
The fall in TSMC shares pushed down the stock's market cap by NT$492.7 billion to NT$14.93 trillion as selling initially focused on large-cap tech stocks also happened across the board after U.S. Secretary of State Antony Blinken said Sunday that Washington and its allies were mulling the possibility of a ban on Russian oil and natural gas imports.
After the stock's American depositary receipts (ADRs) fell by 3.43 percent on the U.S market, TSMC shares faced tremendous selling soon after the local equity market opened and downward pressure escalated with no signs of any immediate rebound, market analysts said.
TSMC and other tech heavyweights moved sharply lower in the wake of a 1.66-percent fall on the tech-heavy Nasdaq index and a 2.42-percent decline on the Philadelphia Semiconductor Index on the U.S. markets Friday and the losses suffered by the Dow futures Sunday evening in the U.S., analysts said.
Amid volatility on the U.S. markets, foreign institutional investors tend to dump liquid high-priced large-cap stocks, like TSMC, to trim their portfolios in the local market, so the selling has nothing to do with the chipmaker's sound fundamentals, according to analysts.
TSMC's losses contributed about 150 points to the Taiex's fall in Monday's morning session.
Despite the recent volatile fluctuations in TSMC's share price, a U.S. brokerage said in a research note that it remained upbeat about the chipmaker's outlook as its advanced N3E process, which is based on the 3-nanometer technology, was showing an improving yield rate, and the development was expected to help the Taiwanese company secure more outsourcing orders from Intel Corp. to roll out central processing units.
According to TSMC, the trial production of its 3nm process will start later this year on schedule and mass production will kick off in the second half of next year. The 5nm process is currently the most advanced technology which TSMC has in mass production.
Worries over the war between Ukraine and Russia are expected to move the global financial markets and in turn, fluctuations of TSMC and many other high-priced tech stocks will also be dictated by geopolitical tensions, said analysts.
Among other semiconductor stocks which suffered a plunge, smartphone chip designer MediaTek Inc. declined by 4.98 percent to NT$974.00 as of 11:50 a.m., marking the first time the stock has traded below the NT$1,000 mark since Nov. 12, 2021, when its share price closed at NT$983.00.
In addition, United Microelectronics Corp., a smaller contract chipmaker in Taiwan, had fallen by 3.18 percent to NT$51.70 and dynamic random access memory (DRAM) chip supplier Nanya Technology Corp. plunged by 6.25 percent to NT$76.50 as of 11:50 a.m.
The bellwether electronics sector fell by 3.50 percent with the semiconductor sub-index down by 3.77 percent as of 11:50 a.m.