Taipei: Shares in Taiwan faced a significant downturn, marking the third steepest point drop in history, primarily influenced by substantial losses in the U.S. tech market, as reported by market dealers.
According to Focus Taiwan, the Taiex, Taiwan's benchmark index, plummeted by 1,683.50 points, or 3.64 percent, closing at 44,571.76. The index fluctuated between 44,454.22 and 46,188.60 throughout the day, with a total turnover of NT$1.55 trillion (US$48.21 billion). This decline is the third largest, following drops of 2,065.87 points on April 7, 2025, and 1,807.21 points on August 5, 2024.
Market analysts highlighted that the sell-off was triggered by U.S. tech stocks taking a hit after Apple and Microsoft increased prices due to rising costs of memory chips and storage devices, prompting concerns about potential impacts on consumer demand. Shares of Apple and Microsoft fell by 6.15 percent and 3.45 percent, respectively, overnight.
Kerry Huang, an analyst at Concord Securities, noted that Taiwan, being a major supplier in the global ICT industry, witnessed a rapid sell-off which persisted throughout the trading session. The electronics index saw a significant drop of 3.91 percent. Taiwan Semiconductor Manufacturing Co., a key player holding over 40 percent of the market's value, decreased by 2.09 percent, closing at NT$2,340.00, contributing around 400 points to the index's fall.
United Microelectronics Corp. also experienced a downturn, shedding 8.12 percent to end at NT$164.00, following recent gains associated with a partnership report with Intel Corp. on 3 nanometer technology development. MediaTek Inc., a smartphone IC designer, faced a maximum daily decline of 10 percent, closing at NT$3,880.00, following increased competition in the ASIC market with Broadcom's partnership with OpenAI.
Other companies such as Aichip Technologies Inc., Delta Electronics Inc., and Yageo Corp. also faced declines, with Yageo witnessing a 10 percent drop to NT$1,015.00. Huang mentioned that rising electronics component prices could affect investments from major cloud service providers, potentially impacting Taiwan's suppliers further.
The sell-off extended beyond the tech sector, affecting other industries. Formosa Plastics Corp. and Formosa Chemicals and Fibre Corp. in the old economy sector fell by 10 percent and 8.91 percent, respectively. Meanwhile, Shihlin Electric and Engineering Corp. and Fortune Electric Co. also closed lower.
In the financial sector, which decreased by 1.70 percent, Cathay Financial Holding Co. and Fubon Financial Holding Co. saw declines. Huang warned that as the Taiex fell below its 20-day moving average of 45,342, the market is now technically weaker, urging investors to brace for potential volatility.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$143.19 billion in shares on the market on Friday.