US Tech Stocks Plunge, Philadelphia Semiconductor Index Drops 7% as Hsieh Chin-ho Issues Warning

林林靖雯 財經主筆2026-10-31 10:18

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All four major US stock indexes closed lower on the 30th, with the Philadelphia Semiconductor Index plunging over 7%. On the 31st, Hsieh Chin-ho said earnings from tech giants have raised concerns over AI capital expenditure, cash flow and layoffs, and Taiwan stocks will inevitably be affected in the short term, but Taiwan's shovel-seller position limits the impact.

All four major US stock indexes closed lower on the 30th, with the Philadelphia Semiconductor Index plunging over 7%. On the 31st, Wealth Magazine Chairman Hsieh Chin-ho wrote on the theme of "AI panic tension," noting that as US tech giants release earnings, the market worries about weaker-than-expected outlooks, deteriorating free cash flow, rising credit default swaps and AI-related layoffs, fueling panic. As a major beneficiary of the AI wave, Taiwan will inevitably be affected by the US market correction in the short term.

Google, Amazon Earnings Touch a Sensitive Nerve

Hsieh said Google reported decent results, but its shares plunged 12.29% on slowing growth in its search business. Amazon's free cash flow over the past 12 months reached US$42.36 billion, a figure that spooked Wall Street and triggered the US market selloff. The market worries that AI capital expenditure is huge, with companies emptying cash on hand to buy computing power without seeing corresponding returns, worsening net free cash outflows. In addition, credit default swaps for Microsoft and Google have hit record highs, seen as market fear emerging midway through AI development.

Intel Plunges 28%, Shaking Semiconductor Supply Chain

Intel shares plunged 28.59% on an explosion at its Israel plant, declining consumer electronics and an ABF substrate shortage, with falling earnings and free cash flow still failing to turn positive. Its market value evaporated by US$140 billion, falling back to its April starting point. From this year's high of US$142.35, the decline reached 54.7%. On the same day, Qualcomm plunged over 10%, while the Philadelphia Semiconductor Index fell 829.4 points, or 7.2%, with profound implications for semiconductor-centered Taiwan.

Taiwan's Shovel-Seller Role Limits Impact

Hsieh noted that large-scale AI-driven layoffs have also deepened concerns, with Microsoft's latest layoffs worrying the market, while many Democratic candidates ahead of the US midterm elections oppose AI. The US market decline ahead of the midterms appears to reflect in advance that Trump could lose control of both the House and Senate, with a high chance of Republican defeat. He believes AI stocks are showing noise and Taiwan stocks will also be affected, but as Taiwan plays a "shovel-seller" role in the AI supply chain, the impact will not be so large.

FAQ

What drove the US market decline?

Markets worried that tech giants' earnings outlooks fell short of expectations, free cash flow deteriorated, credit default swaps climbed to record highs, and AI development brought layoffs, raising doubts over AI capital spending and returns.

Why did Intel shares plunge 28.59%?

Due to an explosion at its Israel plant, declining consumer electronics and an ABF substrate shortage, earnings fell and free cash flow failed to turn positive. Its market value evaporated by US$140 billion, down 54.7% from this year's high of US$142.35.

What is the impact on Taiwan stocks?

Hsieh believes Taiwan is a major beneficiary of the AI wave, so Taiwan stocks will inevitably be affected by the US tech correction in the short term, but because it plays a shovel-seller role in the supply chain, the impact is relatively limited.