A down day with two tapes
The TAIEX fell 461.97 points, or 1.02%, to close Monday at 44,762.32, surrendering the 45,000 mark into the close after touching an intraday high of 45,362 shortly after the open. Turnover was NT$6,294.27 billion. The headline number tells only half the story: this was a mega-cap drawdown, not a broad rout. TSMC (2330) fell NT$35 (-1.45%) to finish at its session low of NT$2,375 and was the single biggest drag on the index. MediaTek (2454) lost NT$25 to NT$3,765 (-0.66%) and Hon Hai (2317) shed NT$2 to NT$243.50 (-0.81%).
The setup was cautious from the open. Friday’s US session saw the Philadelphia Semiconductor Index slip 0.51% to 11,740.37 even as the S&P 500 gained 0.43% to 7,674.37 and the Dow added 0.98% — a chips-specific wobble ahead of Nvidia’s Q2 report on Wednesday, August 26, where consensus sits at US$91–92 billion in revenue. S&P 500 futures traded 0.21% lower during Asian hours, giving local desks little reason to lean against the selling in the heavyweights.
Institutional flows: foreigners sell NT$15.75 billion
Official exchange data for Monday, August 24:
| Investor type | Net trading value | Direction |
|---|---|---|
| Foreign investors | NT$-15.75B | Net sell |
| Investment trusts | NT$+3.71B | Net buy |
| Dealers (prop + hedge) | NT$-4.33B | Net sell |
| Combined | NT$-16.38B | Net sell |
The pattern is familiar: foreign money reducing exposure to the index-defining large caps, domestic investment trusts absorbing part of the supply. Given TSMC’s 69.18% foreign ownership, a NT$15.75 billion foreign net-sell day lands almost mechanically on the index heavyweights — consistent with TSMC closing at its low.
The rotation underneath: semis index rose on a TSMC down day
Here is the oddity worth filing away: the TWSE Semiconductor sub-index gained 1.18% on a day TSMC fell 1.45%. The gap was filled by mature-node foundries and silicon wafer makers. UMC (2303) jumped 6.01% to NT$123.50, Formosa Sumco (3532) locked limit-up at NT$376.50 (+10%), and GlobalWafers (6488) rose more than 7%. Lite-On (2301) also hit its daily ceiling. Financials & Insurance added 1.35% and Shipping 0.32%, while old-economy names in the Formosa Plastics Group were sold.
Valuation helps explain the destination of the rotation. As of Friday’s close, UMC traded at 17.52x earnings with a 2.24% yield, against 27.94x for TSMC and 62.59x for MediaTek. With pre-Nvidia risk reduction concentrated in the AI complex, the cheaper, lower-beta end of the foundry chain was the natural parking spot.
Positioning and leverage — previous-session data, read carefully
Derivatives and leverage figures below lag by one or more sessions and describe the setup coming into Monday, not Monday’s action itself.
- TAIFEX futures (as of Friday, Aug 21): foreign investors held a net open interest of -82,594 contracts in TAIEX futures, with a marginal -204 contracts of net volume on the day. A sizable net short book was already in place before Monday’s cash selling.
- Options (as of Aug 19): put/call ratio of 102.27% on open interest, 115.06% on volume — mildly defensive, not extreme.
- Retail leveraged longs (margin purchases, Friday): market-wide margin loan balance stood at NT$546.9 billion, down NT$1.47 billion — retail was trimming, not adding, into the weekend.
- Institutional short channel (SBL, Friday): balances rose in 407 issues and fell in 440 — near-balanced breadth. At the stock level, UMC’s SBL balance rose 1,108,000 shares and MediaTek’s rose 257,000, while Hon Hai’s fell 449,000. TSMC’s SBL balance edged up 77,000 shares.
The UMC detail is the interesting one: institutional short balances built on Friday, and the stock then rose 6% on Monday while its retail margin balance had been shrinking (-2,453 lots). That is the anatomy of a move with squeeze fuel in it — worth tracking when Monday’s SBL data publishes.
Currency steady, ADR gap at the low end of its range
USD/TWD closed at 31.82 (-0.06%), trading a tight 31.779–31.84 range, with the midday interbank rate at 31.822 — the Taiwan dollar actually firmed 2.6 cents against Friday’s 31.848 despite the foreign equity outflow. No stress signal there.
On the ADR check: TSM closed Friday in New York at US$418.95, which works out to roughly a 12.3% premium over Monday’s Taipei close. Two caveats keep this from being a headline. The premium is structural (roughly 15–25% in recent years, reflecting limited fungibility), and the two closes come from different sessions — Monday’s 1.45% Taipei decline mechanically widens the gap versus Friday’s ADR print. The level sits below the recent structural range; the signal, if any, comes from how the gap resets once New York reopens, not from the level itself.
What to watch
- Nvidia earnings, Wednesday Aug 26 (consensus revenue US$91–92B): the proximate reason the AI heavyweights were sold, and the event that decides whether Monday’s rotation was tactical or the start of something.
- Foreign flow persistence: whether cash-market selling extends beyond Monday’s NT$15.75 billion, and how the next TAIFEX print moves against Friday’s -82,594-contract net short base.
- UMC follow-through: Friday’s 1.1-million-share SBL build against Monday’s 6% rally sets up a clean squeeze-versus-fade test in the mature-foundry trade.
Disclaimer: This is an information and analysis publication, not investment advice. See our Methodology for data sources, standards, and our corrections policy.