TAIPEI (Taiwan News) — Taiwan’s stock market opened lower Tuesday (Nov. 12) and continued to fall throughout the day, led by declines in Taiwan Semiconductor Manufacturing Co. (TSMC) and AI-related stocks.
The Taiwan Stock Exchange Capitalization Weighted Stock Index (TAIEX) fell 547.87 points to close at 22,981.77, breaching the monthly moving average of 23,214. Turnover totaled NT$438.5 billion (US$13.5 billion), per CNA.
TSMC's American Depositary Receipts (ADRs) fell 3.55% amid reports that the US Department of Commerce has asked the company to halt the supply of advanced AI chips to Chinese clients. ADRs are certificates issued by a US bank that represent shares of a foreign company, known as American Depositary Shares (ADS).
While analysts believe most of TSMC's AI chip business is with US customers, the news has dampened investor sentiment. TSMC's stock price closed at NT$1050 (US$32), down NT$35, resulting in a market capitalization loss of NT$907.6 billion.
The tech sector led the decline, with electronics falling 2.69% and computer and peripheral equipment, especially AI server stocks, dropping 2.31%. Finance declined 0.69%.
Traditional industries like autos, plastics, and steel also corrected. A correction refers to a price decline of 10% to 20% from a security's recent high point.
Shen Chien-hung (沈建宏), Tai Shin Mainstream Fund manager, cited potential interest rate cuts and tariff concerns following Trump’s election as reasons for today's market decline. Additionally, the recent upward trend in the Taiwan stock market has increased selling pressure.
Shen identified several key factors influencing the market, including the effectiveness of tax cuts, the US Federal Reserve's monetary policy, and the potential impact of US tech policies on China. He anticipated increased US investment in AI data centers and potential capital expenditure and inventory needs due to deglobalization trends.
In the medium to long term, investors should focus on stocks related to AI, optical communications, key components, biotechnology, electric vehicles and automotive electronics, low-Earth orbit satellites, semiconductor upstream materials, and high-dividend yields, Shen recommended. It is also worth staying updated on drug pricing trends and US healthcare policies
Electronic heavyweight and AI concept stocks declined. Foxconn fell 2.73% to NT$214, while MediaTek dropped 2.32% to NT$1,265.
ASE Technology Holding Co. closed at NT$152.5, down 3.17%. AI server concept stocks also weakened, with Quanta Computer and Wistron closing down 3.69% and 4.1% at NT$313 and NT$117, respectively.
Shipping stocks and the electrical machinery sector had a mixed day. Evergreen Marine closed flat at NT$220.5, YangMing gained 0.42% to NT$72.1, and Wan Hai fell 3.18% to NT$91.3.
In the electrical machinery sector, Airtac International dropped 5.5%, while Fortune Electric rose 3.41%.
