On the 13th (Tuesday) the TAIEX on the Taipei market fell 960.65 points, or 1.95%, to close at 48,341.31, on turnover of NT
Taiwan stocks are heavily weighted toward the AI and semiconductor supply chain, so when U.S. chip stocks and Korean memory stocks turn weak, Taiwan stocks soon follow. Large net selling by foreign investors also pulls money out of the NT dollar market, which is why stocks and the currency fell together. The IMF forecast is the other side: Taiwan's exports and growth have indeed surged on AI demand, but that also means the economy is tied closely to the same supply chain.
If you hold Taiwan stocks, ETFs or related funds, the day's swings show up directly in your account value; one day's move does not make a long-term conclusion, so judge by your own risk tolerance. If you need to pay in U.S. dollars, study abroad, travel or import raw materials, you will feel the NT dollar's weakness, but 32.085 is only one day's close, not a trend.
Yahoo Finance, citing analysts: although foreign investors net sold heavily, investment trusts still bought NT$23.8 billion on net, and financial and traditional-industry stocks stepped in, so the market did not turn fully bearish.
Some market participants also warned that with the Philadelphia Semiconductor Index falling for days and TSMC's ADR losing its monthly moving average, further declines may follow (Newtalk); the IMF also warned that a weaker AI outlook could trigger a market correction (CNA).
The day can be split into three questions. First, whether “AI's bottleneck is capital” is a long-term issue or short-term sentiment: TSMC's investor conference and third-quarter results on the 15th are the next data to check against. Second, whether foreign net selling continues: the third-largest single day does not equal a trend, so watch whether it extends over the next few days. Third, with the NT dollar around 32, how the central bank adjusts. We do not forecast the index; we have not obtained two or more sources for the U.S. index closes on the 13th, so they are not listed.
CNA · Liberty Times · PTS · Reuters · AP · Yahoo Finance · Newtalk (Oct. 12–13)
Taiwan stocks plunge 960 points on the 13th to close at 48,341, with foreign investors' net selling of NT$165.3 billion the third-largest ever; NT dollar at one point falls by more than 30 cents, closes at NT$32.085
The U.S. Philadelphia Semiconductor Index fell for a fourth straight session, and together with the Middle East situation, doubts about AI investment and hawkish remarks from Federal Reserve officials, South Korean, Japanese and Taiwanese shares led Asia's losses; the same day, the International Monetary Fund raised its forecast for Taiwan's growth this year to 10.7%, a contrast with the market.
Taipei stocks opened low and slid lower on the 13th (Tuesday). The TAIEX ended down 960.65 points, or 1.95%, at 48,341.31, on turnover of NT$1.125 trillion (CNA). At its worst it plunged more than 1,200 points, testing the 48,000 mark; the Liberty Times said the deepest drop was 1,235 points, to 48,066, and the decline narrowed only late in the session, when buying in financial shares and in plastics, food, petrochemical and shipping stocks held the market up (CNA, Liberty Times). TSMC closed down NT$50 (CNA). In total, the three major institutional investors net sold NT$198.446 billion, of which foreign and mainland Chinese investors net sold NT$165.342 billion; CNA and the Liberty Times both called it the third-largest single-day net selling ever; investment trusts were net buyers (CNA). The currency market was under pressure too: the NT dollar opened at 31.97 against the U.S. dollar in the morning, its decline worsened in the afternoon, and at one point it weakened by more than 30 cents to the NT$32.2 range; after the central bank's late-session adjustment, it closed in Taipei at NT$32.085, still down 19 cents (CNA). Turnover in the Taipei foreign exchange market was US$4.798 billion; combined with the Yuan Tai foreign exchange market it was US$7.1145 billion, which CNA called the largest ever, while the Liberty Times and the Commercial Times called it the second-largest ever; the bases may differ, and we confirm only that volume was extremely large.
There is more than one cause. Doubts about AI investment are the main line: CNA reported that Broadcom CEO Hock Tan and Intel CEO Lip-Bu Tan warned in turn that the biggest bottleneck to AI expansion is no longer chips but capital; the Philadelphia Semiconductor Index fell 335.63 points, or 2.67%, on the 12th (Monday), its fourth straight losing session. The Liberty Times added that the market also worried about progress in memory technology at China's ChangXin Memory; Micron fell 3.88% on the 12th, and when U.S. stocks opened on the 13th, Micron and SK Hynix fell a further 4% and 5% respectively; Reuters reported that U.S. chip stocks kept falling on the 13th because of a report on Chinese memory and doubts about AI spending. South Korea's KOSPI plunged more than 5% intraday (AP); Yahoo Finance and the Liberty Times both said it at one point triggered a circuit breaker; the Nikkei closed lower (CNA). The Middle East is the second line: oil prices rose after the attack on a Saudi airport, deepening inflation worries (Liberty Times, CNA). The third is hawkish talk from Federal Reserve officials; Reuters reported that Collins said another rate hike before the end of this year is still possible. On the same day the International Monetary Fund (IMF) published its World Economic Outlook: Taiwan's real GDP growth this year was revised up from the April forecast of 5.2% to 10.7%, the highest in Asia-Pacific and the only economy revised to double digits (CNA, Liberty Times, PTS); global growth was revised up to 3.1%, with AI investment offsetting part of the energy shock (PTS); the IMF also warned that a weaker AI outlook could trigger a market correction (CNA, Reuters). We did not obtain two or more sources for the U.S. index closes on the 13th, so they are not listed; at the open the S&P 500 and the Nasdaq fell and the Dow rose (CNA).