Taiwan's equity markets are scheduled to reopen on Monday, February 23, following an extended closure for the Lunar New Year holiday. This return to trading places renewed attention on Taiwan Semiconductor Manufacturing Co (TSMC), the world's leading contract chipmaker, as investors assess the impact of recent Wall Street movements and prepare for a pivotal week of corporate earnings and economic data.
Pre-Holiday Performance and Upcoming Session
TSMC's shares on the Taipei Exchange (2330.TW) last traded on February 11, closing at T$1,915, which represented a gain of T$35, or 1.86%. The stock fluctuated between an intraday low of T$1,875 and a high of T$1,925 during that session. The benchmark Taiex index concluded the pre-holiday session at 33,605.71, climbing 532.74 points, or 1.61%.
In the United States, TSMC's American Depositary Receipts (ADRs), which trade under the ticker TSM, finished the most recent trading day on Friday at $370.54, advancing 2.82%. The performance of these ADRs often provides directional cues for the Taiwan-listed shares following extended market holidays.
Market Context and the AI Rally
The reopening occurs against a backdrop of significant momentum in artificial intelligence-related stocks on Wall Street. The focus now shifts sharply to Nvidia Corporation, the AI chip leader, which is scheduled to report its quarterly financial results on Wednesday, February 25. Nvidia's performance and outlook are widely viewed as a critical barometer for the entire semiconductor sector and the sustainability of the AI investment theme.
"Market expectations for Nvidia are exceptionally high, making a positive surprise a challenging feat," noted Marta Norton, Chief Investment Strategist at Empower, in recent commentary. The outcome of this report is anticipated to have a pronounced effect on chip stocks globally, including TSMC, which is a primary manufacturing partner for Nvidia's advanced processors.
Holiday Calendar and Trading Liquidity
According to the Taiwan Futures Exchange (TAIFEX) holiday schedule, trading resumes on February 23. However, market activity is expected to be abbreviated and potentially thinner, as another market holiday for Peace Memorial Day falls on Thursday, February 27. This condensed, four-session trading week could lead to reduced liquidity, which may amplify price movements in either direction.
Historical data from the Taiwan Stock Exchange (TWSE) indicates a generally positive trend post-holiday; the Taiex has risen on the first trading session after the Lunar New Year break in 14 of the past 20 years.
Strong Fundamentals and Macro Pressures
TSMC enters this period from a position of fundamental strength. The company recently reported January revenue of approximately NT$401.26 billion, a significant increase of 19.8% from December and a 36.8% jump compared to the same month last year. For the week leading into the holiday, the Taiex had surged roughly 5.74%, while the FTSE TWSE Taiwan 50 Index gained about 6.81%. Total trading value on the exchange year-to-date has reached NT$22.38 trillion.
Macroeconomic factors also remain in play. The latest U.S. Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, showed a 2.9% year-over-year increase for December. Further U.S. producer price data is due on February 27, adding another layer of potential market volatility.
Risks and Catalysts Ahead
The week presents a clear risk-reward dynamic for Taiwan's market and TSMC. A robust report and optimistic guidance from Nvidia could fuel continued bullish sentiment for semiconductor and AI-related equities. Conversely, any disappointment in Nvidia's results or outlook, or a broader wave of profit-taking in high-valuation AI names, could trigger a swift pullback. This risk is heightened by the shortened trading week, where lower liquidity can exacerbate price swings.
Traders in Taipei will be closely monitoring TSMC for any gap at Monday's open, followed by the reaction to Nvidia's earnings mid-week. Attention will then pivot to the upcoming U.S. inflation data before markets pause again for the domestic holiday.
