A record intraday drop, half of it clawed back
The TAIEX closed Friday at 39,701.64, down 1,873.08 points (-4.51%), surrendering the 40,000 level on heavy turnover of roughly NT$1,246.1 billion. The closing print understates the violence. The index opened lower at 38,915.76 and at the worst of the morning panic was down 3,737.67 points — roughly 9%, its largest intraday point drop on record — at 37,837.05, before dip-buying and official verbal reassurance pared about half the damage by the 13:30 close.
The trigger was Thursday’s rout in New York. After Democrats swept both chambers in the US midterm elections, investors repriced the risk of stricter federal regulation of AI and data-center buildouts. The Philadelphia Semiconductor Index collapsed 12.25% — its steepest one-day loss since 2020 — and the S&P 500 fell 4.36%. For a market as semiconductor-heavy as Taiwan’s, the only question overnight was how hard the open would be.
The tape: limit-down opens, meaningful recoveries
| Name | Close (NT$) | Change |
|---|---|---|
| TSMC (2330) | 2,135.00 | -4.69% |
| MediaTek (2454) | 3,390.00 | -2.02% |
| Hon Hai (2317) | 224.50 | -4.47% |
| UMC (2303) | 92.00 | -6.50% |
TSMC opened at its 10% limit-down price of NT$2,020, traded as high as NT$2,195 intraday, and settled at NT$2,135 — a 4.69% loss that looked almost orderly given the setup. MediaTek was the standout: it too opened at its limit-down price of NT$3,115, then staged a rebound sharp enough to briefly turn positive before closing down just 2.02%. Hon Hai touched NT$212.5 at the low before recovering to NT$224.50. UMC fared worst of the majors at -6.50%, and after the drop still carries the least demanding multiple of the group at 14.53 times earnings as of Thursday’s TWSE valuation data.
Flows: foreigners sold NT$91.2 billion; trusts bought the dip
- Foreign investors: net SELL NT$91.19 billion — a very heavy single-day liquidation
- Investment trusts: net BUY NT$26.66 billion — domestic funds leaning against the panic
- Dealers (proprietary + hedge): net SELL NT$49.48 billion
- Three institutions combined: net SELL NT$114.01 billion
The pattern is the classic Taipei crisis signature: foreign money out in size, domestic trusts absorbing supply. Whether Friday’s foreign selling was a one-day de-risking or the start of a sustained reduction is the key open question — foreign investors still hold 68.26% of TSMC’s shares outstanding, so their follow-through sets the tone.
Positioning: the derivatives book was already defensive
A labeling note first: TAIFEX positioning data lags by a session, so the figures below describe Thursday’s book — the setup going into the crash, not Friday’s reaction. As of Thursday, foreign investors held a net short of 95,651 contracts in TAIEX futures — on that measure, foreign money was positioned defensively going into Friday’s Taipei crash. Separately, the market-wide volume-based put/call ratio stood at 72.63%; that figure covers all participants, not foreign investors specifically.
Taiwan’s three leverage channels also told a consistent pre-crash story, all as of Thursday. The market-wide margin loan balance — retail leveraged longs — fell NT$20.54 billion to NT$576.4 billion, with margin balances shrinking across the big names (UMC -5,412 lots, MediaTek -688, TSMC -548). Meanwhile the securities-lending channel — the institutional short route, distinct from retail margin shorts — saw balances rise in 660 shortable issues against 248 declines, including an addition of 6,615,000 shares in Hon Hai, 2,883,000 in UMC, 903,000 in TSMC and 392,000 in MediaTek. Retail deleveraging plus building institutional shorts: the stress was visible before Friday’s open.
The ADR gap and the currency
TSMC’s US-listed ADRs fell 10.78% to $353.10 on Thursday. Measured against Friday’s Taipei close, that leaves the ADR about 8.6% above the local line — well below the roughly 15-25% structural premium the ADRs have carried in recent years. The level itself is not a mispricing signal (the closes are from different sessions and the lines are not freely fungible), but the compression is informative: New York sold TSMC considerably harder than Taipei ultimately did once local dip-buyers appeared.
The currency absorbed its share of the outflow. The Taiwan dollar weakened past 33 intraday to a 19-month low of NT$33.04 per US dollar before central bank intervention and exporter dollar-selling pulled it back; the yfinance close printed 32.84. Overnight, S&P 500 futures sat essentially flat at 7,384.50 (+0.02%) — stabilization rather than follow-through selling, which likely helped the afternoon recovery hold.
What to watch
- Tuesday, November 10 — monthly revenue filings. Taiwan-listed companies, TSMC included, must report October sales. The first hard data against which the AI-regulation fear trade can be tested.
- Friday’s TAIFEX positioning, once published. Did foreign investors press the 95,651-contract net futures short into the plunge, or cover into weakness? Pair it with whether cash-market foreign selling extends beyond Friday’s NT$91.19 billion.
- USD/TWD around the 33 line. The central bank showed its hand at Friday’s 19-month low; renewed pressure there would signal the outflow is not done.
Disclaimer: This is an information and analysis publication, not investment advice. See our Methodology for data sources, standards, and our corrections policy.