TAIPEI (TVBS News) — The head of Cathay Securities Investment Trust (國泰投信) expressed optimism for Taiwan's stock market on Thursday (June 5), highlighting the robust demand for artificial intelligence (AI) and the advantageous position of Taiwanese industries. Chairman Jeff Chang (張錫) emphasized that major U.S. cloud service providers plan to increase capital expenditures by 2026, underscoring AI's growing necessity.
Chang noted that U.S. President Donald Trump's reciprocal tariff announcement in early April initially caused a significant market dip. However, most stock markets have recovered, suggesting the worst is over. He predicted that the final tariff impact would likely range between 10% and 15%, as importers bear the costs, ultimately affecting American businesses and consumers.
Despite the anticipated 10% reciprocal tariffs, Chang cautioned that the year's second half would require adjusting time. The rapid appreciation of the New Taiwan dollar has led to exchange losses for exporters' second-quarter financial reports, which will likely be reflected in the third quarter. He pointed out that Microsoft's and Amazon's latest economic forecasts indicate increased capital spending in 2026, reflecting strong AI demand.
Taiwan Semiconductor Manufacturing Company (TSMC, 台積電) reported that advanced processes below 7 nanometers contributed 73% of first-quarter revenue, with CoWoS capacity fully utilized. Chang cited the International Monetary Fund's (IMF) revised 2025 economic growth forecast for Taiwan at 2.9%, reinforcing Taiwan's favorable industrial outlook. He suggested that the fourth-quarter stock market would reflect next year's prospects, with potential U.S. interest rate cuts benefiting a new wave of growth in Taiwan's stocks.