TAIPEI (Taiwan News) — Taiwan’s benchmark stock index closed higher on Wednesday as selected technology stocks attracted buying interest, though investors remained cautious.
The Taiwan Stock Exchange Capitalization Weighted Stock Index (TAIEX) rose 255.3 points, or 0.56%, to close at 45,734.41. Turnover fell to NT$958.3 billion (US$29.9 billion), the lowest level since April 29, ending a streak of 47 consecutive trading sessions with turnover above NT$1 trillion, according to Taiwan Index Plus and CTEE.
The market’s largest index-weighted stocks, which have the greatest influence on the TAIEX, delivered mixed performances. TSMC helped support the broader market, rising 1.02% to close at NT$2,465, according to Anue.
Foxconn gained 0.21% to NT$237.5. MediaTek fell 0.87% to NT$3,995, while Delta Electronics declined 0.26% to NT$1,885.
Defense-related stocks continued to attract investor interest, with drone manufacturers among the session’s strongest performers on optimism over the development of Taiwan’s domestic defense industry. Evergreen Aviation Technologies, Brinno, Advantech, and Thunder Tiger all hit their daily limits.
Optical communication stocks advanced on expectations of sustained demand for AI networking infrastructure. The sector, which focuses on using light-based technologies for data transmission, was led by LandMark Optoelectronics, which hit limit-up, according to CTEE and Business Weekly.
Fiber Optic Communications gained 9.03%, while Visual Photonics Epitaxy, ShunSin Technology, Browave, Apac Opto Electronics, and Truelight each rose more than 4%. Supply chain data showed that revenue previously affected by indium phosphide substrate shortages is recovering as supply conditions improve and prices rise, according to Sinotrade.
Silicon wafer stocks also outperformed. Wafer Works climbed to its daily limit, Formosa Sumco Technology gained 6.92%, Sino-American Silicon Products rose 4.79%, and industry leader GlobalWafers added 2.07%.
Printed circuit board-related shares gained after recent weakness caused by concerns over manufacturing bottlenecks for a key component used in Nvidia’s Kyber NVL144 rack system, highlighted in a SemiAnalysis report. Kinsus Interconnect Technology hit its daily limit, Nan Ya PCB gained 7.28%, and Unimicron Technology rose 2.74%, according to CTEE.
Copper-clad laminate manufacturers also closed higher, with Elite Material, Iteq, and Taiwan Union Technology posting gains. CCL is the base material used to manufacture PCBs for the high-speed computing required by AI servers, according to Business Next.
In contrast, passive component and memory stocks remained among the market’s weakest sectors. Yageo extended its decline, while Lelon Electronics, Ta-I Technology, Walsin Technology, Abc Taiwan Electronics, Max Echo Technology, Hua Jung Components, Taiwan Chinsan Electronic Industrial, and Taiwan Alpha Electronic all fell more than 4%.
Holy Stone Enterprise bucked the trend, however, hitting its daily limit after reporting a 6.8% month-on-month increase in June revenue. The stock closed at NT$953, surpassing industry leader Yageo’s closing price of NT$891.
Power semiconductor stocks delivered mixed performances. HY Electronic hit its daily limit, while Eris Technology and Taiwan Semiconductor gained more than 3%.
Mosel Vitelic, Sdi, Panjit International, Excelliance Mos, Sinopower Semiconductor, and Upi Semiconductor all ended lower. Strong demand from AI servers, high-performance computing, and electric vehicles has tightened the global power semiconductor market, and investors expect Taiwanese manufacturers to raise prices in the third quarter following global industry leaders, according to Business Today.
Investors also shifted funds into traditional industrial stocks. Nan Ya Plastics hit its daily limit, while Formosa Chemicals & Fiber and Formosa Plastics each gained more than 2%.
Analysts said the recent pullback does not signal a reversal in the AI-driven technology cycle but instead reflects profit-taking following a prolonged rally. They said lighter trading volume and range-bound trading could improve market conditions by allowing gains to broaden beyond leading AI stocks, according to CTEE.
Investors are also monitoring external risks, including renewed concerns over Middle East tensions that could push oil prices higher, potentially adding to inflationary pressure and affecting expectations for US interest rates. Market attention is also focused on the upcoming release of the US Federal Reserve’s latest meeting minutes, which could provide clues about officials’ views on future rate decisions.
On the domestic front, upcoming corporate updates could influence investor sentiment. Optical lens maker Largan Precision is scheduled to report June revenue on Thursday, followed by memory chip maker Nanya Technology on Friday.
TSMC will hold its earnings conference next week. The four major companies of Formosa Plastics Group are also scheduled to release their second-quarter earnings and business outlooks later this week.
Cooperative Assets Management said trading activity has cooled noticeably in recent sessions as the index consolidates around its short-term moving averages. The firm said some high-valuation AI stocks have become more volatile because of profit-taking and industry-specific developments, but the broader upward trend remains intact, with both short- and long-term moving averages continuing to point higher.
The firm said investors could also pay attention to sectors outside AI, including financials, power semiconductors, semiconductor packaging and testing, and petrochemical fiber stocks.
This information is not intended as personalized financial advice. Investors are encouraged to conduct their own research and analysis before making investment decisions.
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