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TSMC becomes safe haven for foreign investors; market cap hits high

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TSMC becomes safe haven for foreign investors; market cap hits high

Taipei, March 17 (CNA) Taiwan Semiconductor Manufacturing Co. (TSMC) has become a safe haven for foreign institutional investors, and with continued foreign buying, market capitalization of the stock repeatedly hit new highs, analysts said Thursday.

On his Facebook page, Hsieh Chin-ho, chairman of Taiwan-based Investment Media Ltd. said that TSMC, the most heavily weighted stock in the local market, had risen more than 20 percent from a recent low of NT$131.50 recorded in mid-January.

Hsieh said that the strength of TSMC largely came from foreign institutional investors who have had recorded a net buy of 308.19 million TSMC shares so far this year to push the stock up to an intraday high of NT$160 (US$4.92) on Thursday.

Based on Thursday's intraday high, TSMC's market cap hit a record high of NT$4.14 trillion. Even though the stock closed off its high at NT$158.50, its market cap reached a new high of around NT$4.11 trillion.

According to Hsieh, the local main board has benefited from continued foreign fund inflows to outperform its counterparts in the region.

He said that foreign investors have recorded US$1.91 billion in net fund inflows into Taiwan so far this year, while South Korea suffered a net fund outflow of US$757 million and India registered US$1.457 billion in fund outflows.

Hsieh said that foreign investors rushed to raise their holdings in TSMC and perceived the stock as a safe haven in the local equity market. According to the Taiwan Stock Exchange, foreign institutional investors owned 78.39 percent of outstanding TSMC shares as of Wednesday, making the stock the most favored among foreign investors.

After its strong showing, TSMC retained its position as the largest market cap stock in the local market amid optimism toward the world's largest contract chip maker's earnings outlook on the back of the IC giant's advanced production process, analysts said.

The market has anticipated that TSMC's share of the global 16 nanometer process market will continue to grow, while its efforts in developing the even more sophisticated 10nm process will pay off after it launches mass production of the technology in the fourth quarter of this year.

TSMC kicked off commercial production of the 16nm process in the second half of last year, boosting chips made on its advanced 16nm and 20nm processes to 24 percent of its total sales in the fourth quarter, up from 21 percent in the third quarter.

Analysts said that TSMC is expected to secure all of the orders placed by Apple Inc. to provide a new processor for production of the next generation of iPhones. (By Jackson Chang, Pan Chi-i and Frances Huang)