News about Taiwan

Members of Micron's Taoyuan union in Taiwan voted 99% in favour of authorising a strike over how the company splits profits, though no date has been set. The union wants 15% of operating profit paid to workers through a permanent system, and mediation failed in September, prompting Taiwan's labour ministry and President Lai Ching-te to urge both sides to negotiate. Taiwan is arguably Micron's most important country, with most of its fiscal 2026 DRAM output made there, but the vote so far covers only the smaller Taoyuan site, while the Taichung union, representing around 10,000 workers in Taichung and Tainan, holds a second mediation session on Oct. 22. Micron says it has already sold out all the 2027 capacity of the Taichung factory, so a long strike could leave it short on contractual deliveries. The shares trade near $879, about 28% below their late-June record close of $1,213.56, and the author still expects a deal and does not see the vote as a reason to sell.

Taiwan's central bank said it would step in to stabilize the foreign exchange market if the Taiwan dollar stays volatile after its sharp fall against the U.S. dollar last week. The currency fell NT$0.463 to close at NT$32.338 on Friday, its steepest weekly decline in more than a year. The Taiex dropped 2,202.18 points, or 4.47%, to 47,111.26, dragged down by large-cap tech stocks amid concerns about U.S. inflation, a more hawkish Federal Reserve and high valuations of AI stocks. Foreign investors net sold US$19.40 billion in local shares and pulled US$17.96 billion from Taiwan during the week, while the central bank noted the Taiex fell 5.4% versus a 15.7% drop in the Philadelphia Semiconductor Index and said the currency remained stable over the longer term.

Taiwan's central bank said it will step in to stabilize the foreign exchange market if the Taiwan dollar stays volatile after its sharp losses against the U.S. dollar last week. The currency fell NT$0.463 to close at NT$32.338 on Friday, its steepest weekly drop in more than a year. The Taiex fell 4.47% to 47,111.26 points, dragged by large-cap tech stocks amid concerns over U.S. inflation fueled by high oil prices and AI stock valuations. Foreign investors net sold US$19.40 billion in local shares and pulled US$17.96 billion out of Taiwan during the week. The bank said the currency remains stable over the longer term and will keep monitoring markets, intervening when necessary.

TSMC (TSM) closed at $422.25 on October 15 and has returned 16.21% over six months. The latest quarter was the strongest in the company's history, with revenue of $46.72 billion above management's earlier guidance and net profit up 68.7%, faster than revenue. Gross margin reached 66.4% while the company started mass production on its newest 2nm process, a stage that typically weighs on margins. The risks are a concentrated customer base, spending plans set more than a year ahead, and advanced plants located in Taiwan, whose political status is disputed. The shares trade at 21.41x expected earnings for next year versus 33.67x reported earnings.