Taiwan Shares Fall As Tech Sector Drops On AI Concerns
- ByStartupStory | December 1, 2025
Taiex Plunges 1.03% As TSMC Leads Selloff Amid Bubble Fears
Taiwan shares closed sharply lower on December 1, 2025, with the Taiex benchmark index tumbling 283.95 points, or 1.03%, to 27,342.53—the day’s low—after peaking early at 27,697.06. Trading volume hit NT$476.47 billion (US$15.16 billion) as profit-taking accelerated in the bellwether electronics sector, haunted by fears of an AI investment bubble bursting after U.S. markets’ muted Thanksgiving session.
TSMC Bears Brunt Of AI Valuation Worries
Taiwan Semiconductor Manufacturing Co. (TSMC), accounting for nearly 43% of Taiex capitalization, plunged 2.08% to NT$1,410.00 from an intraday high of NT$1,445.00, dragging the index by around 240 points below its 20-day moving average of 27,418. The electronics subindex shed 1.32%, reflecting broader concerns over overstretched AI valuations despite strong U.S. demand.
Hon Hai Precision Industry Co. (Foxconn), an AI server and iPhone assembler, fell 1.55% to NT$222.00. ASE Technology Holding Co. dropped 1.67%, though MediaTek Inc. bucked the trend, rising 3.58% to NT$1,445.00 after Morgan Stanley hiked its target to NT$1,588. Smaller chipmakers like United Microelectronics Corp. gained 1.53% to NT$46.50, while Nanya Technology Corp. added 2.40% to NT$149.50.
Rotation Into Old Economy Amid Tech Rout
Non-tech sectors showed resilience: Nan Ya Plastics Corp. surged 3.65% to NT$61.10 on copper-clad laminate demand for PCBs. Far Eastern New Century Corp. rose 1.42% to NT$28.60, and Makalot Industrial Co. gained 1.11% to NT$320.00 as investors rotated into undervalued old-economy plays.
Property developers lagged, with King’s Town Construction Co. down 4.02% to NT$42.95 and Highwealth Construction Corp. off 0.66% to NT$37.70. Financials edged lower 0.05%, Cathay Financial Holding Co. up 0.93% to NT$64.80 while Fubon Financial Holding Co. dipped 0.86% to NT$91.80.
Foreign institutions sold a net NT$24.35 billion, amplifying the downturn.
AI Bubble Fears Echo Global Tech Pullback
Analyst Kerry Huang of Concord Securities noted U.S. markets’ shortened Thanksgiving trading failed as a positive lead, with AI bubble anxieties dominating: “Profit-taking was inevitable as investors shunned potential further losses.” Taiwan’s Taiex had risen 22.06% YTD, propelled by TSMC’s 40% surge on AI chip orders, but concentration risks amplify volatility.
Broader context: Asia’s tech rout deepened doubts on AI rally sustainability, MSCI Asia Pacific up 24% YTD but vulnerable to U.S. corrections. TSMC revised full-year growth to mid-30% on AI tailwinds, yet analysts warn export deceleration next year.
Taiwan’s AI/high-tech export boom drives 6% GDP forecast for 2025, but traditional sectors lag, heightening bubble concerns. Taiex’s breach below key averages signals near-term caution unless U.S. tech rebounds.
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