0709 Taiwan Stock Pre-Market | Market Rebounds 800 Points with 'Dragon Tail Swing', ABF Substrate, Silicon Wafers, and Optical Communications Lead Gains

I. Yesterday's Market Overview

On July 8, Taiwan's stock market experienced a dramatic sell-off, with the weighted index swinging over 800 points intraday, briefly plunging to 45,036. However, thanks to strong buying in 2330 TSMC near the close, the market staged a 'dragon tail swing' recovery, closing up 255.30 points (+0.56%) at 45,734.41. Trading volume contracted to NT$992.7 billion. Foreign investors sold NT$37.9 billion, proprietary traders sold NT$16.9 billion, but investment trusts aggressively bought NT$11.96 billion to stabilize the market. Among small and mid-cap stocks, the GreTai index also rebounded from deep losses, closing up 0.46% at 421.39. The ABF substrate, silicon wafer, and optical communication sectors led gains, while memory module and cleanroom engineering stocks faced corrections.

II. Strong Sectors

・ ABF Substrate (Oversold Rebound + Long-Term AI Demand Support):

After a systemic selloff the previous day, the ABF substrate sector showed strong recovery. Analysts noted that long-term demand for high-end ABF substrates from high-end AI servers and 800G/1.6T high-speed switches continues to surge, and short-term oversold conditions triggered aggressive domestic institutional buying. Key stock 8046 Nanya surged 7.28% to close at NT$1,105, with investment trusts buying 1,053 shares; 3189 ChipMOS hit the daily limit, reporting June revenue of NT$4.22 billion (+32.3% YoY), a record high; 6271 Unimicron rose 3.24% to NT$255, with investment trusts buying 430 shares.

・ Optical Communication / Silicon Photonics (Goldman's Buy Rating + NVIDIA CPO Mass Production in H2):

The optical communication sector rallied on strong AI data transmission demand. Goldman Sachs initiated coverage on 3363 Sunlord with a 'Buy' rating and a target price of NT$864. Coupled with NVIDIA's Spectrum-X CPO switches expected to ramp up production in the second half, the sector gained momentum. 3081 United Silicon rose sharply to close limit-up at NT$2,095, with June revenue of NT$421 million (+128.14% YoY), a record high; 3363 Sunlord nearly hit the limit, closing up over 8% at NT$645; 2455 Quanta Storage rose 5.18% to NT$335, with investment trusts buying 446 shares.

・ Silicon Wafers (Tight Supply-Demand + Price Hike Expectations):

With Shin-Etsu and SUMCO showing no clear expansion plans, 12-inch advanced process capacity remains tight, and contract prices (ASP) are expected to rise starting second half of 2026. 6182 Hefei Jingcheng benefited from both pricing and square wafer themes, closing limit-up at NT$160, with investment trusts buying 1,184 shares; 3532 Taiwan Semiconductor rose 6.92% to NT$409.5, with investment trusts buying 769 shares; 6488 GlobalWafers rose 2.07% to NT$1,230, with June revenue at NT$5.624 billion (+16.16% MoM), the highest in nine months.

III. Weak Sectors

・ Memory Modules (Dragged Down by Micron and Samsung Declines):

Micron dropped 4.7% and SanDisk plunged 7.3% in U.S. markets. Morgan Stanley downgraded Samsung to 'Underweight' and warned of up to 40% valuation downside, raising concerns that the memory super-cycle may be nearing its peak. 4967 Team Group dropped 6.61% to NT$233; 3260 ADATA closed flat at NT$404 but showed technical weakness; 8299 Phison traded weakly.

・ Cleanroom Engineering (Profit-Taking at High Levels):

After strong gains driven by semiconductor capacity expansion, the sector faced technical correction. 5536 Santei Engineering plunged 9.68% to NT$1,260; 6691 Yangki Engineering fell 1.79% to NT$715; 6139 Asia Pacific Cleanroom Engineering dropped 1.93% to NT$866.

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This information is for reference only and does not constitute any investment advice. Investors should make independent judgments and bear their own risks.