Taiwan shares end sharply lower after U.S. losses amid AI bubble worries

Taipei, Dec. 15 (CNA) Shares in Taiwan took a beating Monday, led by artificial intelligence-related stocks, as selling followed heavy losses in the United States Friday amid lingering AI bubble worries, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark index, ended down 331.08 points, or 1.17 percent, at 27,866.94 after moving between 28,119.79 and 27,684.87. Turnover totaled NT$436.78 billion (US$13.95 billion).

The market opened down 0.28 percent and selling escalated with AI-related stocks in focus due to a 1.69 percent fall on the tech-heavy Nasdaq index on Friday on lower-than-expected guidance delivered by American chip designer Qualcomm Inc., which fueled concerns over an AI bubble, dealers said.

"Investors simply seized the U.S. tech weakness as an excuse to pocket their recent gains with TSMC (Taiwan Semiconductor Manufacturing Co.), one of the most important AI stocks, under heavier pressure," Moore Securities Investment Consulting analyst Adam Lin said.

Contract chipmaker TSMC, the most heavily weighted stock here, lost 2.03 percent to close at NT$1,450.00. The stock's losses cost the Taiex about 240 points.

IC packaging and testing services provider ASE Technology Holding Co. fell 3.90 percent to end at NT$234.00, and TSMC's application specific integrated circuit (ASIC) design subsidiary Global Unichip Corp. shed 3.30 percent to close at NT$234.00.

In contrast, Smartphone IC designer MediaTek Inc. rose 1.07 percent to end at NT$1,420.00.

Worries over an AI bubble also dragged down AI server maker and iPhone assembler Hai Precision Industry Co., second to TSMC in market value, by 2.42 percent to close at NT$221.50, while Wistron Corp., another AI server supplier, also ended down 1.39 percent at NT$141.50.

"Funds rotated out of the tech sector but moved into select old economy stocks, providing some support to the broader market," Lin said.

Among them, Formosa Plastics Corp. rose 2.51 percent to close at NT$40.90, and Formosa Chemicals & Fibre Corp. soared 5.96 percent to end at NT$33.80 on their relatively low valuations.

Also on bargain hunting, Allis Electric Co. rose 0.99 percent to close at NT$102.00, while Luxe Green Energy Technology Co. surged 7.18 percent to end at NT$20.15 on the government's efforts in renewable energy development.

In the financial sector, which rose 0.17 percent, CTBC Financial Holding Co. added 0.54 percent to close at NT$46.75, and Mega Financial Holding Co. rose 0.73 percent to end at NT$41.45.

"The silver lining was that the Taiex came off a low after the index came closer to the nearest technical support ahead of 27,553, the 20-day moving average," Lin said. "But, the market could see high technical hurdles ahead of 28,568, the intraday high on Thursday."

According to the TWSE, foreign institutional investors sold a net NT$48.99 billion worth of shares on the main board Monday.