Taiwan Stock Market Crash: TSMC Stocks Suffer Record Intraday Drop as Taiex Plunges Over 2,600 Points

Taiwan's Taiex index suffered a historic intraday plunge exceeding 2,600 points on Monday, as market heavyweight TSMC (Taiwan Semiconductor Manufacturing Co.) recorded its largest-ever single-day drop. The dramatic sell-off, which wiped NT$3.5 trillion (US$111 billion) from TSMC market capitalization, mirrored a bruising Friday session on Wall Street, where a stronger-than-expected US jobs report intensified fears of sustained high interest rates stifling the booming artificial intelligence (AI) sector. The contagion began with a 4.18 percent fall in the tech-heavy Nasdaq Composite Index and a severe 10.26 percent plummet in the Philadelphia Semiconductor Index on June 5, driven by concerns that the US Federal Reserve might defer rate cuts or even consider hikes in response to robust employment data. This shift prompted a rapid re-evaluation of high-valuation AI stocks, triggering a region-wide tech rout that saw South Korea's KOSPI index tumble nearly 9 percent. Analysts are characterizing the event as a significant market correction or sector rotation away from overheated tech, rather than a full-blown panic, maintaining that core AI demand remains robust. While Taiwan's Central Bank has signaled readiness to take 'timely' measures to ensure financial stability, the immediate focus is on whether the AI sector's long-term growth narrative can quickly absorb this jolt. Investors will be keenly watching upcoming economic data and central bank commentary for clues on interest rate trajectories, as well as the resilience of key players like TSMC, whose advanced chip manufacturing remains central to global technology supply chains.