Taiwan Shares Fall As Tech Sector Drops On AI Concerns

Market News

Press Release

• December 1, 2025

Taiwan Stock Market Drops 1.03% Amid Tech Sector Selloff

Taiwan’s benchmark Taiex index fell sharply on December 1, 2025, closing down 283.95 points (1.03%) at 27,342.53 after reaching an intraday high of 27,697.06. Trading volumes reached NT$476.47 billion (US$15.16 billion) as investors retreated from electronics stocks amid concerns about overvaluation in artificial intelligence investments, exacerbated by subdued post-Thanksgiving trading in U.S. markets.

Tech Giant TSMC Leads Market Decline

Taiwan Semiconductor Manufacturing Co. (TSMC), representing 43% of the Taiex’s market value, dropped 2.08% to NT$1,410. This decline alone erased approximately 240 points from the index, pushing it below its 20-day average of 27,418. The broader electronics sector fell 1.32% despite robust U.S. demand, highlighting growing concerns about AI-related valuations.

Other significant movers included Hon Hai Precision (Foxconn), which declined 1.55% to NT$222.00, and ASE Technology, down 1.67%. MediaTek bucked the trend with a 3.58% gain to NT$1,445 following a revised Morgan Stanley price target. Smaller chipmakers like United Microelectronics and Nanya Technology rose 1.53% and 2.40%, respectively.

Investors Shift to Traditional Sectors

As tech stocks retreated, capital flowed into undervalued industrial companies. Nan Ya Plastics jumped 3.65% on strong demand for circuit board materials, while Far Eastern New Century and Makalot Industrial gained 1.42% and 1.11%, respectively.

Real estate developers underperformed, with King’s Town Construction falling 4.02%. Financial stocks saw mixed results, with Cathay Financial rising 0.93% while Fubon Financial declined 0.86%. Foreign institutional investors recorded net sales of NT$24.35 billion.

Global Tech Sector Concerns Intensify

Concord Securities analyst Kerry Huang noted, “The abbreviated U.S. trading session failed to provide positive momentum, with AI valuation concerns driving profit-taking.” The Taiex had climbed 22.06% year-to-date, largely fueled by TSMC’s 40% surge, but its heavy weighting now amplifies market volatility.

Despite TSMC forecasting mid-30% annual growth from AI demand, analysts caution about potential export slowdowns. Taiwan’s projected 6% GDP growth for 2025 relies heavily on tech exports, creating economic imbalances as traditional sectors lag. The index’s break below key technical levels suggests near-term caution until U.S. tech stocks stabilize.