Sharp Turmoil in Taiwan Stocks Below 40000 Points
Concerns over U.S. AI data center construction continued to spread, with Taiwan stocks staging an epic sharp shock on the 6th. The weighted index plunged 3737.67 points in early trading, hitting a low of 37837.05 points, setting the largest intraday drop in history. The Executive Yuan and the Financial Supervisory Commission then declared their determination to stabilize the stock market, the decline gradually narrowed, rebounding over 1800 points from the low, closing at 39701.64 points, down 1873.08 points or 4.51%, falling below the 40000-point mark, with turnover reaching 1 trillion 2461.04 hundred million yuan.
TSMC Narrows After Hitting Limit-Down
Index heavyweight TSMC (2330) hit the limit-down price of 2020 yuan in early trading, plunging 220 yuan, setting the largest intraday drop in history, then opened the limit-down, once rebounding to 2195 yuan. The share price continued to fluctuate at midday, closing at 2135 yuan, down 105 yuan or 4.69%, recording the second-largest closing drop in history. In the centralized market only 106 gainers, 976 decliners, with another 27 flat, selling pressure remained heavy.
Orders Deferred Rather Than Cancelled
Facing a broad correction in technology stocks, institutional investors noted that a slowdown in U.S. data center construction may impact the Taiwan AI supply chain, but at present it is mainly order deferrals, not demand cancellations, with the degree of impact varying明显 across industries. HanYa Investment indicated that U.S. data center construction mainly faces power supply and permit bottlenecks, with some projects therefore delayed, and concerns amplified after the midterm elections. However, most new capacity for 2027 has already entered construction or completed financing, with major risks concentrated in projects after 2028 that have not yet secured power and permits. The estimated actual cancellation ratio of secured orders remains only about single-digit percentage, with most handled by postponement or renegotiation, and no sign of a sharp disappearance in AI demand yet.
4 Types of Supply Chains Most Sensitive
For the Taiwan supply chain, server ODM, thermal, power and PCB, substrate and CCL industries, as they are more closely linked to data center construction schedules, are more likely to be affected by order deferrals in the short term; by contrast, wafer foundry and advanced packaging have better demand visibility due to more prepayments and long-term commitments. HanYa estimates that CoWoS monthly capacity can reach 170000 to 200000 wafers by the end of 2027, with supply still relatively tight.
P/E Ratio Falls to 13 Times
Despite weak short-term market sentiment, HanYa Investment noted that the recent correction in Taiwan stocks has gradually reflected market uncertainty over AI supply chain earnings for 2027 to 2028. Market forecasts for 2027 corporate earnings have not yet been revised down明显, with the 2027 forward P/E ratio falling to about 13 times, near the lower end of the 5-year P/E range; if concerns over data center construction and AI capital expenditure ease, a market rebound can be watched. Industry positioning remains favorable on wafer foundry, ASIC, power, thermal and PCB, with follow-up attention on cloud service providers (CSP) 2027 capital expenditure guidance, U.S. data center power and regulatory policies, as well as Taiwan manufacturers monthly revenue, inventory and advance receipt changes.