【Large Volume Strong Rise Stock Adjustment】Taiwan Stock Market Plummets, When Will It Stop?

When will the Taiwanese stock market stop falling? The market is taking volume, and the main players are secretly buying! [4976 Chialing] Limit up + surprise behind the scenes! The video shares with you... (Like, subscribe, turn on notifications) Let's take a look at today's Taiwanese stock market! The weighted index opened low and closed lower today, falling by 1564.18 points to close at 40039.18, with a turnover of 10835.70 billion. Observing the movements of the three major institutions today, foreign investors sold 222.51 billion NT dollars, investment trusts bought 90.93 billion NT dollars, and proprietary traders sold 185.99 billion NT dollars. The three major institutions collectively sold 317.57 billion NT dollars, with foreign investors selling for two consecutive days, proprietary traders selling for four consecutive days, and investment trusts buying for twenty-six consecutive days, totaling 2549.16 billion NT dollars in net buying. On Tuesday, the four major US indices showed mixed performance. The Dow Jones Industrial Average surged by 537 points, mainly driven by consumer, financial, and industrial stocks, indicating a shift of funds from large-cap tech stocks to defensive and cyclical sectors. The Philadelphia Semiconductor Index plummeted by 4.49%, and the Nasdaq Index also came under pressure, reflecting the market's cautious attitude towards high capital expenditures in the AI industry and intensified semiconductor competition. Chip stocks became the center of market selling pressure, with NVDA-US NVIDIA, AMD-US AMD, AVGO-US Broadcom, and multiple semiconductor stocks all weakening simultaneously, causing tech stocks to significantly underperform the broader market. The market is currently focused on the 'Super Wednesday,' including the Federal Reserve's latest interest rate decision, MSFT-US Microsoft, and META-US Meta's upcoming earnings releases, as well as the management's latest outlook on AI investment and capital expenditures. Investors are expecting tech giants to further clarify the recovery timeline and profit model of AI investments. If the earnings guidance exceeds market expectations, it will help improve the recent weak market sentiment for tech stocks. Conversely, if capital expenditures continue to expand without driving profit growth, it may continue to suppress the performance of high P/E stocks in the short term. Affected by the correction of US tech stocks, the weighted index opened lower and closed lower today. The Taiwanese stock market faced heavy selling pressure on Wednesday, with electronic heavyweight stocks being the main reason for the index decline. 2330-TW TSMC, 2317-TW Hon Hai, 2454-TW MediaTek, and other heavyweight stocks all weakened simultaneously, dragging the weighted index below the 40,000-point whole number level. The closing volume increased with black K bars. The Taiwanese stock market tested support near the half-year line, with the lower half-year line rising, providing some support. The market was filled with deleveraging and high valuation adjustment sentiment. In terms of capital flows, the combined margin trading and margin financing for listed and OTC stocks decreased by 490.27 billion NT dollars (listed stocks decreased by 372.67 billion NT dollars over four consecutive days, and OTC stocks decreased by 117.6 billion NT dollars over three consecutive days), indicating that market float is being continuously washed out, which helps with capital sedimentation. In the short term, this is favorable for the Taiwanese stock market to brew a technical rebound. From the market perspective, funds have begun to shift from electronic stocks to non-electronic sectors, including optical, AI applications, shipping, financial, construction, and tourism stocks, all seeing buying support. This shows that market funds are reducing investment portfolio volatility through sector rotation. Among them, optical lenses, machine vision, and AI edge computing-related stocks continue to benefit from the rising demand for AI terminal applications, becoming market focuses. On the other hand, shipping and financial stocks have shown relatively strong performance as risk-averse demand increases. Meanwhile, memory and testing groups have weakened simultaneously due to the pullback of international peer stock prices and corporate earnings impacts. The market is concerned that AI-related companies' continued expansion of capital expenditures may compress short-term free cash flow and profit performance, putting high P/E stocks under valuation adjustment pressure. From the industry's fundamental perspective, AI demand has not shown signs of cooling. META-US Meta, AMZN-US Amazon, and other cloud service providers continue to increase their investment in AI data centers. ASML-US ASML has again raised its full-year operating outlook, indicating that global semiconductor equipment demand remains strong. AI infrastructure investment maintains a long-term growth trend. After AI officially enters the commercialization and landing application stage, the demand for high-speed computing, AI servers, network communication equipment, high-speed transmission, heat dissipation, advanced packaging, and key components is expected to continue to expand. Leveraging its complete manufacturing capabilities and global leading semiconductor advantages, Taiwan's supply chain will remain an important beneficiary of the global AI wave, including 2330-TW TSMC, 2382-TW Quanta, 3231-TW Pegatron, 6669-TW Wistron, and 3017-TW Chialun, among others, whose medium- to long-term growth momentum is worth expecting. Overall, in the short term, the market will be affected by the Federal Reserve's interest rate decision, US tech giants' earnings, and the correction of the semiconductor sector, and market volatility is expected to intensify. However, with margin trading continuing to decline and capital gradually sedimenting, coupled with unchanged long-term AI demand, it is expected that after the Taiwanese stock market undergoes consolidation, it will still have the opportunity to return to a fundamental-driven market. Operationally, it is recommended that investors avoid chasing high P/E stocks and pay attention to AI supply chains, optics, high-speed transmission, finance, and non-electronic sectors with fundamental support, adopting a staggered deployment and low-price support strategy to cope with short-term volatility and seize medium- to long-term growth opportunities. In terms of heavyweight stocks, 2330-TW TSMC fell by 3.51%, closing at 2200 NT dollars. The market reported that it will raise wafer foundry prices. The price increase for advanced processes below 7 nanometers is approximately 5% to 10%, and high-performance computing (HPC) orders may have an additional 10% to 15% surcharge. Mature processes also have room for price increases. This price adjustment reflects TSMC's gradual enhancement of market pricing power through its technological leadership, supply scarcity, and high delivery capability. With the increase in overseas expansion, equipment, manpower, and depreciation costs, price adjustments help maintain profit levels. Looking ahead to 2026-2027, as AI evolves from Generative AI to Agentic AI, computing demand is expected to continue to rise. Combined with the growth of advanced processes and HPC demand, we remain optimistic about TSMC's long-term operating momentum. 2317-TW Hon Hai fell by 0.42%, closing at 237 NT dollars. The Wall Street Journal reported that NVIDIA plans to provide OpenAI with up to $250 billion in financing guarantees, helping to lease SoftBank's under-construction mega data center in Ohio, USA. The overall scale of AI infrastructure investment is expected to exceed $500 billion, becoming the world's largest AI data center project. The market is optimistic that, as an important partner of OpenAI and SoftBank, Hon Hai is expected to benefit from the significant growth in demand for AI servers, server racks, and data center hardware, becoming a major supplier. However, NVIDIA's simultaneous assumption of financing guarantees has also raised market concerns about the cyclical financing and credit risks of the AI industry. If future AI investment slows down, related companies may face greater financial pressure. 2454-TW MediaTek fell by 4.98%, closing at 3150 NT dollars. The operating outlook for the second quarter of 2026 shows weak demand for smartphones, but the cloud AI ASIC business is taking off rapidly. The third quarter is expected to be a turning point, and TPU chip revenue is expected to see strong growth starting from the fourth quarter, accounting for more than half of the company's revenue by the end of 2027. Affected by the weak Chinese smartphone market, the third-quarter revenue is estimated to decrease by about 5% sequentially, with a gross margin maintained at 45% to 46%. The market is focused on the upcoming earnings call, with key points including the 2027 TPU revenue guidance. Analysts expect MediaTek's AI ASIC market share to improve. If estimated based on the global billion-dollar market, the long-term AI business is expected to become the main growth engine. In addition, the progress of 2nm TPU mass production, CoWoS layout, and the competitive landscape of next-generation AI chips will also be market focuses. In terms of individual stocks, 2332-TW Friendcom successfully entered the global low-orbit satellite communication supply chain. Its subsidiary D-Link secured an order for Starlink ground station network switches, with the first batch of approximately 20,000 units expected to start shipping in September, initially with about 500 units shipped per week, with the possibility of gradually increasing as construction progresses. This product, with its high cost-performance ratio, Taiwanese manufacturing, and compliance with US NDAA and TAA regulations, successfully obtained customer certification. In the future, it is expected to expand the satellite communication layout. Additionally, the company, in collaboration with 3380-TW Mastech, is actively laying out opportunities in high-speed networks, optical communications, and AI data centers. Benefiting from the simultaneous growth of AI, high-speed transmission, and low-orbit satellite demand, analysts expect new businesses to gradually ferment from the second half of the year and continue into next year, becoming an important new driving force for operational growth. 6226-TW Lite-On brightened with a limit-up! Benefiting from the growth in demand for AI data centers, high-efficiency power supplies, and energy storage, it is actively transforming and laying out carbonization.