Sharp Rebound After Plunge as Panic Eases
After the U.S. Democratic Party gained control of both the House and Senate, market worries grew over tighter AI regulation and data center development rules, along with rising concerns over financing costs and investment returns. The PHLX Semiconductor Index plunged 12.25% on November 5, then rebounded 4.21% the next day. The VIX fear index retreated from a high of 28.18 to 25.64, down 9.01% in a single day. Cathay PHLX Semiconductor 00830 fund manager Li Hanlin said the rebound in the PHLX index alongside the pullback in the VIX shows panic easing, as large AI players and emerging cloud service provider Neocloud actively responded to policy calls by offering to share grid expansion and other infrastructure costs to ease the impact of data centers on local electricity prices, which is expected to reduce development uncertainty.
Fundamentals Unchanged as Holdings Rebound Across the Board
Despite policy variables amplifying short-term selling pressure, AI and semiconductor fundamentals have not changed materially. Investors should watch whether regulation affects specific regions or projects, and whether cloud operators adjust capital expenditure, as gauges of the rally's staying power. As of November 6, 00830 beneficiaries totaled 201829, topping the 200,000 mark. In U.S. trading on November 6, major holdings led the rebound, with AMD surging over 11%, TSMC ADR rising over 6%, Micron rising over 5%, and NVIDIA closing up nearly 3%, with buying covering key segments including AI compute chips, advanced process and memory.
History Shows Rebounds After Sharp Drops, Focus on Earnings Support
Looking back at major drops in the PHLX index, when fundamentals were largely unchanged, rebounds often followed. On March 16, 2020, hit by the pandemic, it fell 15.90% in a single day, then rebounded 26.9% in the following month and rose 48.7% over three months; on April 3, 2025, hit by U.S. reciprocal tariffs, it fell 9.88% in a single day, then rose 45.0% over the following three months. Li Hanlin noted that sharp drops on external events are often followed by rebound opportunities, but sustainability depends on industry demand, corporate earnings and capital expenditure support. Recent data shows AI demand continues to feed through, with AMD last-quarter revenue of USD 13.377 billion, up 45% year-on-year, including data center business up 97% year-on-year; SpaceX announced on October 26 that it had reached a binding financing lease commitment with entities managed by Apollo Global Management, planning to secure NVIDIA's next-generation Vera Rubin chips and related equipment through a financing arrangement of about USD 40 billion.
One Holding for the Supply Chain as Split Vote Counts Down
As AI applications extend from model training to inference computing and enterprise deployment, demand for high-performance chips, memory bandwidth and high-speed transmission is rising, spreading growth opportunities across different parts of the supply chain. 00830 is the only ETF in Taiwan directly tracking the U.S. PHLX Semiconductor Index, covering 30 semiconductor companies, including NVIDIA, AMD, Broadcom for custom chips and high-speed networking, TSMC for advanced process, Micron for memory and Applied Materials and other equipment leaders. Facing short-term negatives, investors may consider adding on dips in batches when sentiment improves. The 00830 fund split proposal is now entering a beneficiary meeting vote, with voting ending November 16, the beneficiary meeting to be held November 19, and results expected to be announced November 20. If approved, the price per unit will be adjusted proportionally, with the number of units increased accordingly, total value unchanged, and the tracked index and strategy also unchanged.