Taiwan falls 2.49% to 45,211.83 as concerns return over AI spending returns

Key Facts

Taiwan’s TAIEX closed at 45,211.83 on Friday, October 30, down 1,156.50 points, or 2.49%, in a session with trading value of NT$877.73 billion (US$26.96 billion), according to Taiwan’s Central News Agency (CNA). The decline came as concerns about returns on artificial intelligence spending returned to investor sentiment following earnings reports from major US cloud services companies. An analyst at Concord Capital Management said that “concerns about AI spending have returned to haunt investor sentiment” after the reports were released. The index traded between 44,726.26 and 46,139.79 during the session before ending below 45,300. It thus closed below its 120-day moving average, a key technical support level cited in a subsequent CNA report.

Pressure spread to Taiwanese technology stocks after the Nasdaq fell 1.38% on Thursday, October 29, sending Taiwan’s electronics index down 2.90% in Friday’s session. CNA linked the US selloff to concerns that massive investments in AI may not generate commensurate returns, and to the possibility that major cloud services companies may struggle to generate adequate sales from their AI infrastructure investments. The agency said disappointing sales at Alphabet and Amazon’s elevated AI spending added to pressure on both stocks. Taiwan’s losses came amid a broader decline in emerging Asian equities: the MSCI Asia emerging markets index fell 2.5%, while South Korea’s Kospi dropped 4.5%, according to a Reuters report cited by Fidelity. US trading on Friday showed continued weakness in technology stocks, with the Nasdaq Composite losing 2.9% and the S&P 500 closing down 1.8% in its worst day since June, while the Dow Jones fell 572 points, or 1.1%, according to the Associated Press.

TSMC was among the main sources of pressure on the index, falling 1.86% to NT$2,370 and accounting for about 360 points of the TAIEX’s decline. The company represents more than 40% of the index’s total market capitalization, giving its shares significant weight in the session. MediaTek fell 3.21%, ASE Technology dropped 2.20%, and AIchip Technologies slid 6.93%. The moves show that the selloff affected semiconductor companies and their component makers, as well as the market’s largest chipmaker by index weight. Foreign investors also reduced their holdings in TSMC, MediaTek and Delta Electronics during October, according to traders cited by CNA.

Outflows intensified selling pressure in the Taiwanese market. Foreign investors and institutions were net sellers of NT$112.47 billion in shares on Friday, October 30, according to Taiwan Stock Exchange data reported by CNA. Traders said foreigners’ net sales reached NT$994.3 billion (US$30.59 billion) in October through the publication of the October 31 report, as they reduced holdings in major technology stocks. Taiwan’s central bank had said foreign investors recorded net equity sales of NT$1.25 trillion, equivalent to about US$38.7 billion, between July and October 21. Their total financial outflows have reached about US$54.3 billion since the start of July, including capital gains and cash dividends. The central bank said concerns about a renewed military conflict between the United States and Iran, alongside a global selloff in technology stocks over AI spending concerns, weighed on the index and encouraged foreigners to withdraw more funds.

Friday’s decline extended the month’s downward trend: the TAIEX closed at 48,353.49 on October 1, then at 47,035.58 on October 28 and 46,368.33 on October 29, before closing at 45,211.83 on October 30. Exchange data showed the latest close was below technical support near 45,300, in line with the 120-day moving average. In a Saturday report, CNA said investors would watch whether the index remained above Friday’s intraday low of about 44,726. An analyst said Taiwan’s market appeared relatively more resilient than the Philadelphia Semiconductor Index and South Korea’s market, with major cloud services companies continuing to commit to heavy spending on AI infrastructure. But US moves after Taiwan’s market closed added pressure to expectations for the next session.

After TSMC’s US depositary receipts fell 5.95% overnight on Friday, TAIEX futures dropped 867 points, or 1.91%, to 44,433, according to a CNA report published on October 31. The Nasdaq Composite and the Philadelphia Semiconductor Index fell 2.86% and 7.20%, respectively, during the same overnight period, the report said. Against this backdrop, an analyst expected the index to face strong downward pressure on Monday, November 2, with investors watching Friday’s low. Traders said the US midterm elections scheduled for November 3 and Anthropic’s planned initial public offering in mid-November added to market uncertainty. Meanwhile, Taiwan’s central bank had raised its GDP growth forecast to 11.48% in 2026 and projected growth of 5.82% in 2027, saying demand for emerging technology applications was likely to continue supporting exports and private investment.