A persistently strong Taiwanese dollar (NT$) would erode margins for Taiwan's tech firms and weaken their cost competitiveness. While this is unlikely to significantly erode the overall financial strength of most rated tech companies in 2025-2026, it could prove more painful for those heavily reliant on domestic production with little flexibility to shift manufacturing overseas. The Taiwanese dollar rose nearly 10% against the U.S. dollar over just two days in early May. This was possibly the result of life insurers' hedging activities, foreign capital inflows for stock investments, and speculative trades amid growing speculation of U.S. dollar depreciation. The rapid appreciation in the Taiwanese dollar surprised Taiwan's financial market and the economy's all-important export-oriented sectors, especially the high-tech industry. Taiwan's
