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Inflation Fears Trigger Sell-off in Taiwan AI Chip Testing Stocks

Electronic Technology · Semiconductors · economic_daily · 2026-10-15

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Taiwanese stocks plummeted as inflation concerns pressured high-valuation AI testing firms, with ASE Technology and key testing interface providers hitting limit-down.

What Happened

Market Sell-off: The Taiwan stock market experienced a sharp decline on the 15th, with the index dropping over 1,600 points during intraday trading. Semiconductor testing and interface companies faced heavy selling pressure, leading to multiple stocks hitting their daily limit-down thresholds.

Stock Performance: ASE Technology, the leading packaging and testing firm, fell to its limit-down price of 673 TWD. Key testing interface players, including MPI Corp, also hit limit-down, while Powertech Technology saw its shares slide by more than 9%.

Inflation Impact: Rising inflation and sustained high interest rates have increased corporate financing costs. Investors are now applying higher discount rates to future earnings, which disproportionately affects high-growth technology stocks that rely on long-term profit projections.

Capital Expenditure Risks: For the capital-intensive semiconductor testing sector, higher borrowing costs complicate the evaluation of expansion projects and return on investment. The market is currently reassessing the viability of high-CAPEX growth stocks, leading to a broader valuation correction across the industry.

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