News / Taiwan / economic_daily
Taiwan Stocks Plunge Below 49,000 as AI Profit-Taking Triggers Sector Rotation
Electronic Technology · Semiconductors · economic_daily · 2026-10-13
Taiwan's benchmark index dropped 960 points to 48,341 on Tuesday as concerns over AI industry bottlenecks prompted investors to shift capital into shipping and chemicals.
What Happened
Market Sell-off Intensifies: Taiwan stocks faced significant downward pressure on Tuesday, closing at 48,341 points after a sharp decline of 960 points. The market witnessed a surge in trading volume to 1.12 trillion TWD, signaling a shift in sentiment as investors reacted to warnings from major AI chip manufacturers regarding expansion bottlenecks.
Technical Indicators Deteriorate: The daily candlestick chart shows a decisive bearish move, breaking through previous support levels. With the daily KD indicator falling below the 80 threshold, the market is entering a period of correction, and analysts are closely watching the 50-point mark as a critical support level for the bulls.
Capital Rotation Underway: As AI-related stocks faced heavy profit-taking, capital flowed into traditional sectors such as shipping, petrochemicals, and optics. Shipping companies are benefiting from peak season demand, while petrochemical firms are gaining attention for their strategic pivot into semiconductor materials.
Sector Outlook: While the broader electronics sector remains volatile, specific themes like CPO (Co-Packaged Optics) and optical components continue to show long-term potential. Investors are advised to monitor the recovery in petrochemical demand and the ongoing transformation efforts within the industrial sector.