The Taiex index dropped by 8.4% in Taipei, marking its largest decline since 1967.
The plunge was led by Taiwan Semiconductor Manufacturing Co. (TSMC), a key player in the AI-chip sector, which saw its stock fall by 9.8%, a record daily drop. This decline also impacted its South Korean competitors.
David Wu, an analyst at Cathay Futures Consulting in Taipei, remarked, “It’s hard to predict when the decline will stop. It’s still too early to tell.”
Taiwan was among several markets that saw significant drops on Monday amid worries that the US might be heading towards a recession, prompting investors to seek safety away from riskier assets.
To address investor concerns, the head of the stock exchange announced that efforts would be made to stabilise the market.
Taiwan Stock Exchange President Lih-Chung Chien stated, “The timing of implementing stability measures will depend on market conditions, and we are waiting for guidance from regulators,” after the market closed.
TSMC, the world’s largest contract chipmaker, experienced a sharp decline. The stock, which had surged over the past year due to high demand for AI chips, fell by 9.75%, close to the daily limit of 10%, ending at T$815.
Despite market speculation about delays in delivering Nvidia’s new GB 200 chips, analysts noted that TSMC’s fundamental outlook remained unchanged.
Other major technology stocks in Taiwan also faced heavy selling. Mediatek saw a 9% drop, while Quanta and Foxconn each lost nearly 10%, hitting the daily allowable limit.
Allen Huang, a vice president at Mega International Investment Services, predicted that the decline might continue for the next couple of days, with technical support levels expected between 19,200 and 19,300 points.
Of the nearly 1,900 companies listed on Taiwan’s main exchange and the smaller OTC market, nearly 800 saw their shares fall by the maximum permitted amount. Taiwan’s Minister of Economic Affairs, J.W. Kuo, warned investors to prepare for the possibility of a market crash.