Trump's Semiconductor Comments Trigger Stock Market Declines of Taiwan and Korea – BusinessKorea
Former President Donald Trump, officially nominated as the Republican presidential candidate on July 16 (local time), has sparked significant market reactions with his recent comments on the semiconductor industry. Speaking to supporters at the second day of the Republican National Convention in Milwaukee, Wisconsin, Trump gave a thumbs-up, signaling his readiness for the upcoming election battle.
Early on the morning of July 17, Trump made waves during an interview with Bloomberg Businessweek, stating, "Taiwan has taken all of our semiconductor business. Right now, we are giving them billions of dollars to build new semiconductor plants in our country, and now they are going to take that too. They will build it here, but then they will take it back to their country." These remarks have had immediate repercussions on the stock market, particularly affecting major tech and semiconductor stocks.
On the night of July 17, major tech stocks such as Nvidia and Micron showed weakness on the New York Stock Exchange, with Nvidia falling by 1.6% and Micron by 2.6%. Trump's comments, which seemed to question the semiconductor law subsidies paid to Taiwan's TSMC, further dampened investment sentiment towards domestic semiconductor stocks.
The impact was also felt in the Asian markets. On July 17, SK Hynix's stock price closed at 220,500 won(approximately $163), down 5.36% from the previous day, marking the largest drop in nearly nine months since October 26 of the previous year. Hanmi Semiconductor, a major supplier of equipment for SK Hynix's production lines, also fell by 5.18% to close at 159,400 won. Samsung Electronics ended the day at 86,700 won, down 1.14%. Foreign investors were net sellers of SK Hynix, offloading shares worth 409 billion won, making it the most sold stock in the domestic market.
TSMC's stock price on the Taiwan Stock Exchange also took a hit, closing at 1,030 TWD, down 2.37% from the previous trading day. The broader market reflected these declines, with the KOSPI closing at 2,843.29, down 22.8 points (0.80%) from the previous day. In the Seoul foreign exchange market, the won-US dollar exchange rate was recorded at 1,381.5 won as of 3:30 PM, down 3.4 won from the previous trading day.
Daishin Securities commented on the situation, stating, "The decline in major semiconductor stocks was due to the weakness in U.S. tech stocks and Trump's interview pointing out Taiwan's semiconductor surplus."
The global semiconductor industry is a critical component of the modern economy, with companies like SK Hynix, TSMC, and Samsung Electronics playing pivotal roles. The geopolitical tensions between the United States, China, and Taiwan add another layer of complexity, as Taiwan's significant position in the semiconductor market influences global supply chains. Trump's presidency and his policies, particularly his stance on trade and manufacturing, have historically impacted market dynamics, and his recent comments are no exception.
The semiconductor law and the subsidies provided by the U.S. government aim to bolster the domestic semiconductor industry and reduce dependency on foreign manufacturers. However, Trump's remarks have cast doubt on the effectiveness and future of these subsidies, leading to market volatility.
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