Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, has attracted 500,000 new shareholders this year despite a 28.8 percent decline in its share price.

TSMC had a new high of about 1.42 million shareholders as of Oct. 7, up more than 500,000 from the end of last year, according to data compiled by the Taiwan Stock Exchange (TWSE), where TSMC shares are traded.

Investors were not deterred by the NT$177 (US$5.59), or 28.8 percent, fall in TSMC’s share price since the beginning of the year as of Oct. 7, the last trading session before the long Oct. 10 National Day weekend.

The stock closed at NT$438 per share on Oct. 7, after finishing 2021 at NT$615 per share. It hit an interday high of NT$688 on Jan. 17, and has slid ever since, trading at NT$600 for the last time on March 31, and reaching an interday low of NT$416.50 on Oct. 3.

Analysts said many small retail investors who could not afford to buy the standard 1,000 share lot in one transaction have taken advantage of the falling stock price to buy odd lots — orders of fewer than 1,000 shares — of TSMC shares.

Among the 502,423 TSMC shareholders who have came on board so far this year, 322,439 were investors who bought the stock in odd-lot trading to boost the total number of odd-lot TSMC shareholders to 858,153, according to the TWSE.

The TWSE introduced the odd-lot trading system in October 2020 to attract more small retail investors to the market.

The number of TSMC shareholders who owned 1,000 to 5,000 shares has risen to 462,309, up from 305,595 at the beginning of the year, while the number of shareholders who hold more than 1 million shares fell by 23 to 1,505, TWSE data showed.

Foreign institutional investors have cut their holdings in TSMC, as they moved their funds out of the country and into U.S. dollar denominated assets to take advantage of interest rate hikes totaling 3 percentage points since March by the U.S. Federal Reserve, analysts said.

Their sell-off has hurt TSMC shares and also contributed 1,467 points of the 4,516.56 points the benchmark Taiex has shed since the start of 2022. It is down 24.79 percent on the year.

TSMC’s consolidated sales of NT$1.63 trillion in the first nine months of this year exceeded the NT$1.59 trillion in sales reported for the whole of 2021, but its dividend yield of 2.51 percent as of Oct. 7 has failed to match U.S. Treasury yields of over 4 percent, making the stock less attractive.

In addition to worries over rising interest rates, the global semiconductor sector is being hurt by a decline in spending power due to inflation that has eroded demand for consumer electronics gadgets such as computers, smartphones and TVs, analysts said.

Those issues have raised concerns over TSMC’s future sales as their customers adjust their inventories in the changing market environment.

TSMC has scheduled an investor conference for Oct. 13 to detail the third quarter results and give guidance for the fourth quarter.

The company reportedly has informed its clients of a product price hike, but traders have been anxiously waiting for the company’s comments on whether the price hike will be frozen for next year.

They also want to know if TSMC will continue to aggressively expand global capacity and spend massively on plants and equipment in the near future as global demand weakens.

TSMC has forecast its capex for 2022 will come close to US$40 billion.

Source: Focus Taiwan News Channel