Taiwan’s Taiex index increased by 23.90 points, or 0.12%, closing at 20,546.49.

Trading turnover reached NT$269.795 billion (US$8.92 billion).

Investor sentiment remained cautious as they awaited the US.

Federal Reserve’s policy announcement on May 7, 2025. Analysts expect the Fed to keep its key interest rates unchanged.

Taiwan Semiconductor Manufacturing Co. (TSMC), the largest stock on the exchange, rose by 0.87% to NT$928.00 (US$28.77).

This gain contributed approximately 65 points to the Taiex, offsetting losses in other semiconductor and electronics stocks.

🔗 Source: Focus Taiwan

🧠 Food for thought

1️⃣ Taiwan’s semiconductor sector faces dual tariff and monetary policy pressures

Taiwan’s stock market caution reflects a broader vulnerability as its critical semiconductor industry navigates both U.S. monetary policy uncertainty and tariff threats.

TSMC, which produces over 90% of the world’s advanced semiconductors, forms the backbone of Taiwan’s economic stability 1.

The market’s thin turnover and cautious positioning ahead of the Fed meeting reflects historical patterns where emerging markets are especially sensitive to U.S. monetary decisions, with research showing a 1% U.S. interest rate increase can trigger significant declines in emerging market equity prices 2.

This sensitivity is amplified by Taiwan’s export-dependent economy, with approximately 25% of its exports destined for the U.S., making it particularly vulnerable to both interest rate changes and tariff threats 3.

The news article’s mention of “military concept” stocks gaining reflects investors seeking defensive positions amid this uncertainty, a typical pattern during periods of geopolitical and economic tension.

2️⃣ TSMC’s strategic importance creates both market protection and exposure

TSMC’s ability to gain 0.87% despite broader market caution demonstrates its unique position as both a shield for Taiwan’s market and a target for geopolitical pressure.

Recent TSMC developments