Widening Rate Gap Spurs Foreign Withdrawals, Stocks and Currency Fall Together
US inflation concerns heated up, with markets expecting a sharply higher chance the Fed hikes again before year-end, while Taiwan's central bank held rates for the 10th straight time, set to widen the Taiwan-US rate gap further. Foreign investors net sold Taiwan stocks for 10 consecutive trading days from 6th to 20th, totaling 8380.65億元, turned net buyers of 22.39億元 on the 21st, then net sold 816.57億元 again on the 22nd, with cumulative net sales reaching 2.2兆元 year-to-date to Oct. 22. On foreign selling withdrawals and large outward remittances, the NT dollar fell for 7 straight days from 12th to 20th, touching 32.714 on the 20th, halting the slide with a 0.225 rebound on the 21st, and reporting 32.53 on the 22nd, leaving the 33 defense facing a severe test.
Export Orders Hit Record High, Electronics Share Over Seventy-Five Percent
Ministry of Economic Affairs statistics show September export orders reached 1142億美元, up 62.4% year-on-year, topping 1000億美元 for the 2nd straight month for a continued record high, with the first 9 months reaching 8192億美元, up 56% year-on-year, of which electronics and information communications products together exceeded seventy-five percent. Institutions point out that electronic components and semiconductor makers book most revenue in US dollars while paying costs in NT dollars, with every 1% NT dollar depreciation lifting gross margins of large electronics exporters by 0.3 to 0.5% on average, plus foreign-exchange conversion gains. TSMC holds a 53% global market share, with second-quarter net foreign-exchange gains of 83.15億元, accounting for 1.18% of after-tax net profit, versus 1.08% in the first quarter and 0.72% in the third quarter.
Four Groups, Six Stocks in Focus on US-Dollar Revenue Share
Institutions use over sixty percent US-dollar revenue share as the screen, listing four beneficiary groups in order: AI server assembly foundry at 85 to 95%, semiconductor wafer foundry and packaging/testing at 80 to 90%, key electronic components at 75 to 85%, and traditional export machine tools and auto parts at 60 to 80%. Large export heavyweights recommended are TSMC, Hon Hai and Quanta, with 85 to 90% US-dollar revenue share. High-elasticity small- and mid-caps recommended are thermal component maker AVC, silicon photonics maker LandMark and ASIC maker Alchip-KY. Stock picks target leading firms with high US-dollar revenue share, superior export net margin ratios, and ability to pass through imported raw-material costs, as market funds tilt toward names with substantive US-dollar income.
33 Defense Battle Ahead, Watch Tightening Risks
Institutions say 33 is not only the central bank's psychological and substantive defense line for the NT dollar, but also concerns import-inflation control capability; once lost, the central bank is bound to step up intervention, including adjusting rate policy, requiring vigilance over liquidity-tightening risks. If depreciation is too fast, soaring imported raw-material costs will erode profits of domestic-demand and non-exporter firms. On strategy, watch North American cloud giants' capex changes, elevated margin balances and signs of loosening chips in high-valuation names, focus on high US-dollar revenue-share industries and flexibly adjust leverage and holdings.