Taiwan Stock Market Dips as TSMC Leads Tech Selloff

Taipei, Sept. 30 – Taiwan’s stock market took a sharp hit on Monday, primarily due to significant declines in shares of Taiwan Semiconductor Manufacturing Co. (TSMC) and other leading tech companies. The benchmark Taiex index on the Taiwan Stock Exchange (TWSE) fell by 598.25 points, or 2.62%, to close at a low of 22,224.54. The total market turnover was NT$390.84 billion (US$12.34 billion).

Monday's drop added to a difficult period for the market, with the index shedding 44.53 points over September and 807.71 points during the third quarter of 2024.

TSMC, a global leader in contract chip manufacturing and the most heavily weighted stock on the Taiex, saw its shares fall by 4.3% to NT$957. This decline pushed the company’s market capitalization below NT$25 trillion, accounting for 349 points of the index’s overall loss. TSMC's dominant 35% weighting on the index is significantly higher than the next largest stock, Hon Hai Precision Industry Co., which holds a 3% share.

Other key tech stocks also suffered losses. Hon Hai closed down 1.83% at NT$187.5, while MediaTek Inc., a leading smartphone chip designer, saw its shares plummet by 6.75% to NT$1,175. Largan Precision Co., a manufacturer of smartphone camera lenses, dropped 2.68%, ending the day at NT$2,540.

The broader electronics sector fell by 3.47%, while other sectors like shipping dropped 3.75%. The electric machinery and cable and wire industries also saw declines of 2.15% and 1.48%, respectively.

According to Alex Huang, an analyst at Mega International Investment Services Corp., the market downturn was largely driven by investors shifting their focus away from tech stocks to non-tech sectors. Given TSMC’s prominence in the market, Huang suggested that the company's performance will be crucial in determining whether the Taiex can stabilize in the coming days.