Taiwan shares closed higher on Wednesday, but gains faded as investors took profits in Taiwan Semiconductor Manufacturing Co. ahead of its investor conference, underscoring how heavily the market still leans on the chip giant even as doubts build around the payoff from AI spending.
Taiwan Shares Rise as TSMC Holds Before Conference
The Taiex rose 0.59% to 48,625.83 after briefly topping 49,000, with trading volume reaching NT$928.62 billion. TSMC, which accounts for about 40% of Taiwan’s market value, finished unchanged after earlier hitting NT$2,535 and alone trimmed about 360 points from the index as traders locked in gains and waited for management comments due Thursday.
Sentiment Indicators
The pullback comes as the AI trade faces a sharper valuation test. Dealers said investors are growing more cautious about returns on massive AI infrastructure spending, while Broadcom CEO Hock Tan’s recent description of some AI capital flows as “casino gambling” added to the skepticism around richly priced semiconductor stocks.
The pressure was concentrated in chips. Nanya Technology fell 1.54%, MediaTek slipped 1.10% and TSMC retreated from its intraday high, while some related names held up better, including ASE Technology, which rose 0.95%. TSMC’s recent price action also points to a cooling in momentum: conventional technical indicators showed the stock easing after a strong run, with its relative strength index dropping to 38.8 and the MACD narrowing.
Outside semiconductors, money rotated into more cyclical and domestic names. Hon Hai Precision Industry gained 1.25% and Lite-On Technology rose 2.54%, while petrochemicals extended a sharp rally after stronger quarterly results. Formosa Plastics and Formosa Chemicals & Fibre each hit the daily limit up 10%, lifting the petrochemical index 6.64%, and Nan Ya Plastics jumped 9.40%.
The broad split reflects a market balancing AI optimism against higher financing and inflation risks. Foreign institutional investors sold a net NT$20.04 billion of Taiwan stocks on the main board, adding another layer of pressure to a market that is still dominated by semiconductor flows and global risk appetite.
Investors will now focus on TSMC’s conference and later U.S. inflation data, both of which could set the tone for Taiwan equities and the wider chip trade in Asia.
| Entity | Gains | Losses |
|---|---|---|
| Petrochemical stocks | ▲Strong earnings-driven buying | ▼Profit takers after rally |
| TSMC | ▲Long-term AI demand story | ▼Near-term profit taking |
| Semiconductor bulls | ▲Await conference catalyst | ▼Valuation pressure and skepticism |
| Foreign institutional sellers | ▲Lower exposure risk | ▼Missed rebound in Taiwan shares |
