Taiwan shares take biggest plunge in history; TSMC leads the fall

Taipei, Aug. 5 (CNA) Taiwan's stock market suffered its biggest points and percentage fall in history Monday, hurt by global volatility and heavy losses on the U.S. markets at the end of last week, dealers said.

No sector was spared, but the bellwether electronics sector seemed hardest hit, with chipmaking giant Taiwan Semiconductor Manufacturing Co. (TSMC) down by the maximum 10 percent at one point due to the weakness of its counterparts on the U.S. markets, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark weighted index, ended down 1,807.21 points, or 8.35 percent, at 19,830.88 after moving between 19,783.50 and 20,982.92. Turnover totaled NT$640.79 billion (US$19.59 billion).

Both the 1,807 point and 8.35 percent declines were the largest in the Taiex's history as the index quickly ripped through a critical technical support threshold of around 20,900 points, the 120-day moving average.

The market opened down 3.02 percent and dipped below the 20,000 point mark in mid-morning before recouping some of the losses late in the morning.

Selling escalated again in the afternoon, especially in the electronics sector to complete the history-making market rout, which came after a 4.43 fall in the Taiex on Friday.

The plunge was triggered by a 1.51 percent fall in the Dow Jones Industrial Average on Friday and a 1.21 percent decline a day earlier after disappointing U.S. manufacturing activity and job data triggered fears the U.S. economy could be falling into recession.

TSMC, the most heavily weighted stock on Taiwan's market, closed down 9.75 percent at NT$815.00.

The loss contributed about 710 points alone to the Taiex's fall, and led to tumbles in the electronics index and semiconductor sub-index of 9.06 percent and 9.48 percent, respectively.

"Judging from the losses of TSMC, investors rushed to reduce their holdings indiscriminately, ignoring the chipmaker's sound fundamentals," Moore Securities Investment Consulting analyst Adam Lin said.

"They were just scared by the emergence of systemic risks as weakness in U.S. markets ignited selling around the region," Lin said, referring to a 12.40 percent plunge in Tokyo and an 8.7 percent tumble in Seoul on Friday.

"Today's regional selling also reflected growing tensions in the Middle East," Lin said.

TSMC's weakness was mirrored by other semiconductor heavyweights.

Smartphone IC designer MediaTek Inc. closed down 9.08 percent at NT$991.00, and IC packaging and testing services provider ASE Technology Holding Co. fell 9.41 percent to close at NT$130.00.

Application-specific integrated circuit (ASIC) designer Alchip Technologies, Ltd. shed 10 percent to end at NT$2,105.00, and Global Unichip Corp., TSMC's ASIC design subsidiary, also lost 10 percent to close at NT$954.00.

United Microelectronics Corp., a smaller contract chipmaker, appeared somewhat resilient, closing only 5.58 percent lower at NT$49.95.

"Investors also took cues from reports about (U.S.-based artificial intelligence chip designer) Nvidia's delay of shipments of its AI chips to cut their holdings in AI-related stocks," Lin said.

Tech website The Information reported that Nvidia told customers that the roll-out of its Blackwell graphics processing units will be delayed by three months or longer due to unexpected design flaws.

Among the AI-related stocks, AI server makers Quanta Computer Inc. and rival Wistron Corp. both fell the maximum 10 percent to close at NT$239.50 and NT$86.70, respectively.

Wistron's cloud application subsidiary Wiwynn Corp. plunged 10 percent to end at NT$1,790.00, and PC brand Acer Inc., which produces AI PCs, also tumbled 10 percent to close at NT$40.30.

IPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, slid 10 percent to end at NT$168.00 as the company also rolls out AI servers.

"Panic-led selling spread to non-tech stocks, adding downward pressure on the broader market throughout the session," Lin said.

The construction industry, which had been resilient in recent sessions, lost 9.14 percent Monday.

Cathay Real Estate Development Co. and Kindom Development Co. both fell 10 percent to close at NT$27.50 and 50.60, respectively, while Da-Cin Construction Co. lost 9.09 percent to end at NT$53.00.

Elsewhere in the non-tech sector, Formosa Plastics Corp. lost 4.36 percent to close at NT$54.80, and Nan Ya Plastics Corp. shed 5.16 percent to end at NT$45.95.

Formosa Chemicals & Fibre Corp. dropped 6.31 percent to close at NT$46.00, and textile brand Far Eastern New Century Corp. ended down 5.14 percent at NT$33.20.

In the financial sector, which lost 6.93 percent, Fubon Financial Holding Co. shed 9.09 percent to close at NT$79.00, and Cathay Financial Holding Co. lost 9.30 percent to end at NT$55.60.

"U.S. stocks have continued to trend lower in after-hours trading and I expect more volatility to come," Lin said. "So I would not rule out the possibility that the Taiex will test the next technical resistance ahead of around 18,900 points soon."

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$69.96 billion in shares on the market Monday, down from their net sell of NT$94.43 billion seen on Friday.