TAIPEI (Taiwan News) — Taiwan's benchmark stock index closed lower on Monday after giving up early gains as selling pressure emerged.
The Taiwan Stock Exchange Capitalization Weighted Index (TAIEX) fluctuated by more than 950 points during the session before closing down 224.23 points, or 0.48%, at 46,556.39. Turnover totaled NT$1.02 trillion (US$31.83 billion), according to Taiwan Index Plus.
Most of the largest index-weighted stocks, which have the greatest influence on TAIEX movements, declined. TSMC came under pressure near the close, with more than 3,000 lots, or 3 million shares, traded before the stock finished 0.61% higher at NT$2,460, according to CTEE.
MediaTek fell 1.67% to close at NT$4,125, while Delta Electronics declined 3.86% to NT$1,995. Foxconn gained 0.62% to close at NT$242.
Defense and drone-related stocks continued to attract buying interest as investors expected the legislature to approve a defense drone budget. Coretronic, Magnate Technology, Aewin Technologies, and E-lead Electronics all closed at their daily limit-ups, while Thunder Tiger gained 8.56%.
Power semiconductor stocks also moved higher. Niko Semiconductor, Taiwan Semiconductor Co., SDI, Panjit International, Jih Lin Technology, and Sinopower all closed at their daily price limits.
As AI servers require significantly more electricity, power delivery systems have been upgraded to handle higher energy demand, increasing the importance of power semiconductors, which convert, distribute, and protect electrical power. International semiconductor companies such as Infineon Technologies and STMicroelectronics have taken the lead in raising prices, and institutional investors expect domestic firms to follow suit in the third quarter, according to Business Weekly and CTEE.
Power management chip stocks also benefited from expectations of higher component prices. Anpec Electronics closed at its daily limit of NT$440, while Silergy rose 2.48% and Global Mixed-mode Technology gained 1.41%.
Passive component stocks, which had recorded strong gains recently, saw profit-taking. Prosperity Dielectrics and Taiwan Chinsan Electronic Industrial both closed at daily limit-downs.
Ta-I Technology fell 9.66%, while leading passive component maker Yageo declined 3.83%. Holy Stone Enterprise dropped below the NT$1,000 mark.
E Sun fund manager Wang Wei-che (王偉哲) said the market's positive long-term outlook remains supported by fundamentals. However, he warned that borrowing to buy stocks has continued to increase among investors, according to CTEE.
Foreign investors have also recently built a record 84,000 short futures contracts, reflecting expectations that the market could decline. This has added to the risk of continued market volatility.
Although investor sentiment may continue to influence short-term market performance, Wang said long-term returns are still determined by corporate earnings and economic growth.
He noted that historical data show that investing when the TAIEX retreats to key moving average levels has, on average, generated better one-year returns than investing at random. This suggests that gradually building positions during market pullbacks may improve long-term investment performance.
Wang recommended that investors adjust to sector rotation and focus on industries benefiting from rising demand driven by AI adoption and advanced technologies. These sectors include semiconductor testing, chip design, mature process technologies, and silicon wafers.
This information is not intended as personalized financial advice. Investors are encouraged to conduct their own research and analysis before making investment decisions.
