Taiwan’s benchmark weighted index ended Oct. 30 down 2.5%, after tumbling as much as 3.5% during the session. At the day’s low, the index was off more than 10% from the record high hit on Oct. 6, briefly crossing into technical-correction territory before cutting some of the damage late in the session.
Bloomberg said the selling was driven mainly by the ongoing slump in global AI stocks. Vey-Sern Ling, managing director at Union Bancaire Privee, said the sell-off in Taiwanese shares was mostly sentiment-driven and tied to the global AI trade, rather than any deterioration in fundamentals.
The index briefly fell more than 10% from its Oct. 6 peak
The weighted index dropped as much as 3.5% intraday and, for a moment, was down more than a tenth from its Oct. 6 high. Big names took hits too. Taiwan Semiconductor Manufacturing Co. (TSMC, 2330) slipped 1.8%, MediaTek (2454) lost 3.2%, and Delta Electronics (2308) plunged 9.8%.
Bloomberg said TSMC and Delta were the two stocks that put the heaviest drag on the index.
Bloomberg pointed to three pressures hitting AI shares
Bloomberg said investors are contending with higher borrowing costs, heavy AI capital spending, and earnings that have missed expectations. And overnight in the U.S., weak results — including Intel’s — added to the strain, speeding up the move out of AI shares and into defensive assets such as U.S. Treasuries.
The report also said Taiwan’s fuller tech supply chain has made many investors view it as a better-quality AI play than South Korea. But that edge did not protect the market from the global sell-off.
Analyst says fundamentals are still improving
Ling said Taiwan’s fundamentals are still getting better. Hyperscalers are sticking with capital expenditure plans, and improving bottom-up visibility at companies has made the case for owning Taiwanese stocks stronger.
He also gave a warning: “Even if the crowd is running the wrong way, do not stand in front of a stampeding flock.” In other words, he was warning against pushing too hard against the short-term move.
Signals from MediaTek and Delta earnings calls
MediaTek said on its earnings call that fourth-quarter revenue is expected to come in between NT$210.1 billion and NT$221.8 billion, up 25% to 32% from the previous quarter. The company also said for the first time that it has won a second cloud ASIC customer, with revenue contribution expected to start in 2028, while keeping its target of reaching $16 billion in ASIC business by 2027.
Delta said on its own earnings call that combined capital spending by major cloud companies next year is expected to reach $1.2 trillion to $1.5 trillion. It also said power shortages are likely to keep getting worse and that it is talking with customers about product price hikes, which could be finalized as early as the fourth quarter of this year through the first quarter of next year.
Both companies signaled that AI demand remains firm. But their shares still dropped with the wider market on Friday. For now, it is still unclear whether global AI stocks can steady themselves anytime soon.
