Seventh-largest point drop on record
The TAIEX fell 1,612.60 points, or 3.59%, to close at 43,307.54 at Tuesday’s close in Taipei, breaking below the 44,000 mark and logging the seventh-largest single-day point decline in the exchange’s history. Turnover was heavy at NT$928.1 billion, and the selling was widespread: the electronics sub-index lost 3.69% and the OTC Taipei Exchange index dropped a bruising 6.42%, with the mid-cap space compounded by margin calls and algorithmic stop-loss selling — though the Financials & Insurance sector index bucked the rout, rising 2.54%. The index traded between 43,191.58 and 44,614.64 on the day.
The proximate trigger came from New York. In Monday’s US session the Philadelphia Semiconductor Index dropped 3.37% to 10,328.33, falling below its half-year moving average, as investors questioned how quickly the massive AI infrastructure spending at the likes of Amazon, Alphabet and Intel converts into revenue and cash flow. The S&P 500 slipped 0.51% to 7,541.40, with rotation into defensive Dow sectors. Layer on foreign outflows across Asian equities and caution ahead of the US midterm elections, and Taipei had little to lean on.
Semiconductors: the leadership cracks below the surface
- TSMC (2330) fell 1.50% to NT$2,295, breaking below NT$2,300 intraday amid foreign trimming — yet it was the day’s relative outperformer. With the index’s largest weight down only 1.5% against a 3.59% benchmark decline, the rest of the tape fared far worse.
- MediaTek (2454) tumbled 7.43% to NT$3,675, the hardest-hit heavyweight. It also carried the richest multiple into the session — 65.6x earnings at Monday’s close versus TSMC’s 27.0x — leaving the most room for an AI-narrative derating.
- UMC (2303) dropped 6.36% to NT$103.00; ASE Technology (3711) sank 8.6% to NT$616.
- Downstream, Hon Hai (2317) lost 2.19% to NT$245.50, Quanta fell NT$6.5 to NT$311.5, and Delta Electronics closed lower.
- Memory, optics and substrate names — Winbond, Nanya Technology, Nan Ya PCB, Kinsus, Largan, Win Semiconductors — plunged or hit limit-down after weak guidance from Japan’s Kioxia and declines in Micron shares.
Flows: foreigners unload NT$107 billion, trusts lean against it
| Institution | Net trading value (Nov 3) |
|---|---|
| Foreign investors | NT$-107.31B (net sell) |
| Investment trusts | NT$+19.90B (net buy) |
| Dealers (prop + hedge) | NT$-59.06B (net sell) |
| Three institutions combined | NT$-146.46B |
Foreign investors sold NT$107.31 billion net in the cash market — an outright liquidation day — with dealers adding NT$59.06 billion of supply. Domestic investment trusts were the only institutional buyers, absorbing NT$19.90 billion. The currency told the same story: the New Taiwan dollar opened at 32.61 per US dollar, weakened through 32.8 in early afternoon to touch 32.82, and finished at 32.80, a 0.60% slide on the day.
Positioning going into the rout (previous-session data)
Derivatives and leverage figures below are Monday’s data — Tuesday’s prints publish with a lag — so they describe the setup into the drop, not today’s reaction. Foreign investors held a net short of 89,379 contracts in TAIEX futures open interest as of Monday, and the options put/call volume ratio stood at a complacent-looking 93.75%. Neither reflects anything done during Tuesday’s session.
On leverage, keep the three channels separate. Retail margin longs were quiet: the market-wide margin loan balance eased just NT$0.77 billion to NT$622.7 billion as of Monday — no sign of forced deleveraging in that data yet, which is worth remembering given the margin-call selling reported in the OTC space today. The institutional short channel, by contrast, was already broadening: SBL short balances rose in 630 shortable issues versus declines in 235 as of Monday. At the stock level, UMC’s SBL balance grew 4.46 million shares and Hon Hai’s 2.47 million, while TSMC (-85,000) and MediaTek (-224,000) saw modest covering — institutions were pressing the second tier, not the bellwether.
The ADR gap
TSMC’s ADR closed at $398.63 in Monday’s US session, about 14% above Tuesday’s Taipei close on the five-for-one ratio. That premium is structural — roughly 15-25% in recent years, reflecting limited fungibility — and the two closes come from different sessions, so the level itself signals nothing. What is notable is that the gap sits slightly below the recent band even after Taipei’s Tuesday decline, consistent with the heavier selling US-listed semis took on Monday. Watch the day-to-day change in this gap, not its size.
What to watch
- Tuesday’s TAIFEX data, once published: whether foreign futures net short open interest deepens from Monday’s -89,379 contracts, and whether the 93.75% put/call ratio jumps toward hedging territory.
- Foreign selling pace versus trust buying: NT$107.31 billion of foreign supply was met by only NT$19.90 billion of trust demand today; a second day at this ratio keeps pressure on both the index and the TWD at 32.80.
- The overnight US setup: S&P 500 futures were modestly lower at 7,553.25 (-0.28%) — a calmer tape than Monday — with the US midterms the next macro event on the calendar.
Disclaimer: This is an information and analysis publication, not investment advice. See our Methodology for data sources, standards, and our corrections policy.