Taiwan Stock Market Plunges 2,031 Points, Third-Largest Drop in History, Heavy Sell-Off in Blue Chips, Closes at 41,603 Below Previous Low Forming Technical Peak

Amid market concerns over rising interest rate expectations and potential overinvestment in AI, Taiwan's stock market experienced another massive sell-off today (28). Blue-chip stocks fell sharply, and popular sectors including passive components, memory, silicon wafers, and power components all suffered significant declines. The index opened lower and continued to fall, closing down 2,030.83 points (4.65%) at 41,603.36—the lowest level in over two months—confirming a technical market top. Trading volume reached approximately NT$809.4 billion, higher than yesterday.

With the incoming U.S. Federal Reserve Chair Walsh signaling a hawkish stance, markets now estimate a 40% chance of a rate hike this week. This triggered a more than 2% drop in the Philadelphia Semiconductor Index (SOX) on Monday, unleashing broad selling pressure across Asian markets. South Korea's highly leveraged market triggered its circuit breaker again, marking the eighth time this year, plunging over 10% in a single day—down more than 35% from its peak. Japan's market also faced resistance from moving averages, falling nearly 5% and retesting support at the 200-day moving average.

Taiwan's market broke below its previous low, reaching its lowest level in two months. Technically, a clear market top has formed. Of all listed companies, 1,780 declined while only about 100 rose. Over 1,000 stocks fell more than 3%, indicating extremely heavy selling pressure.

Blue-chip stocks turned deeply red. TSMC (2330-TW)(TSM-US), the market leader, has been net sold by foreign investors by over 800,000 lots this year, amounting to over NT$1.6 trillion withdrawn. Today, it fell again, briefly touching NT$2,270—a drop exceeding 3%. It closed at NT$2,280, its lowest in nearly two months, losing its NT$60 trillion market cap threshold and contributing 556 points to the index decline.

MediaTek (2454-TW), Delta Electronics (2308-TW), UMC (2303-TW)(UMC-US), Unimicron (3037-TW), and Nan Ya Plastics (1303-TW) all hit their daily trading limits (down). ASE Holding (3711-TW)(ASX-US) and Taipower Electronics (2383-TW) both fell over 8%, further dragging down the overall market.

Memory stocks were the hardest hit today. Nanya Technology (2408-TW), Winbond Electronics (2344-TW), Aplus (6531-TW), Macronix (2337-TW), Etron Technology (5351-TW), PSMC (3006-TW), ChipMOS (8150-TW), Phison Electronics (8299-TW), Inari Amertron (8096-TW), Powertech Technology (6239-TW), and Innodisk (5289-TW) all posted significant losses.