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Taiwan's stock index (TAIEX) has been one of the success stories of 2021, led by Taiwan Semi Conductor $TSM. However the chip shortage is taking it's toll and new outbreaks of the coronavirus has shocked the island nation. The TAIEX is down 8.6% in the largest 2 day drop since 1990 and down more than 13% from its April high

Taiwan Stocks Fall

The index is set for the worst drop since stock-price limits were loosened in 2015, with heavyweight Taiwan Semiconductor Manufacturing Co. and Hon Hai Precision Industry Co. among the biggest drags.

Taiwan Stocks 5 11 21

Computer chips are dominated by Taiwan Semiconductor Manufacturing Co (TSMC) the world's largest contract chipmaker. TMC and fellow Taiwan Semi's are considering another round of price increases on automotive chips, Nikkei reported on Monday. Prices collapsed after years of a glut and the intial collapse of the global economy wrecked revenue and profits for chipmakers. Now the a global semiconductor shortage puts pricing power firmly on the side of TMC and friends prices hikes of up to 15% are being considered by TSMC Vanguard International Semiconductor subsidiary for auto chips. The other Taiwanese firms including No. 4 foundry United Microelectronics Corp will most likely follow suite.

Read More: Chipmaker Taiwan Semiconductor Dominating Automaker Price Negotiation Pressures Inflation Risk COVID Worries Return

Further to the chip crisis the COVID threat has popped in.

Taiwan, who has been a global leader in containing the virus announced that it is seeing some small outbreaks of community COVID-19 transmission.

The head of the Central Epidemic Control Center (CECC) announced restrictions, some of which include:

  • Tightened restrictions on outdoor and indoor gatherings decreasing limits to 500 and 100 people, respectively, until June 8
  • Eating and drinking will also be banned on all trains and coaches till June 8
  • Scaled down university graduation ceremonies classes of more than 100 switched to remote learning
  • Since Monday, all citizens aged 65 and above are included in the country's vaccination program.
  • Taiwan has reported 1,210 cases of Covid-19 to date including 106 locally-transmitted cases 12 deaths.
  • 105 patients with the virus are currently hospitalized

From the Traders Community Research Desk

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