MediumV Technology Geopolitics & AI3 November 2026, Tuesday · 17:20 TRT (UTC+3)
AI spending fears deepen the chip sell-off in Taipei and Seoul
The Taiex closed down 1,612.60 points, or 3.59%, at 43,307.54 on 3 November, its seventh-largest points loss on record. The Kospi fell by the same 3.59% to 5,648.79. The trigger was concern over the financing burden of heavy AI spending in the United States.
According to Focus Taiwan, foreign investors were net sellers of NT$107.31 billion on Taipei's main board in a single day, while turnover rose to NT$928.06 billion. The night before, the Philadelphia Semiconductor Index had fallen 3.37% and the Nasdaq 1.07%. The largest foundry stock, which accounts for more than 40% of the index, fell 1.50% and took about 280 points off the index. Losses in packaging and chip design reached the 6–9% range.
In Seoul, JoongAng reports that foreign investors were net sellers of about 1.5 trillion won and institutions of 511.7 billion won, while retail investors were net buyers of 1.7 trillion won. The two big memory makers fell 4–5%, and the slide pushed memory stocks in Taiwan to their daily limit-down price. The paper also cites caution ahead of the US midterm elections among the triggers.
The constraint lies in financing, not earnings. Taiwan's economy grew 14.36% in the third quarter, yet pricing now hinges on the return on AI investment and on the cost that high bond yields will impose on cloud companies. An analyst at Concord Securities said the index could test its 29 July low of 39,384.
Talay assessment
Bottom line
The sell-off prices a financing worry, not an earnings one, for Asia's chipmakers: as debt-funded AI spending by the big cloud companies is questioned, foreign capital leaves Taipei and Seoul on the same day. Because Taiwan's 14.36% growth rests on this single demand chain, volatility could turn into macro risk.
Likely effects
- Asian chip marketsNegativeWeeks
Foreign outflows of NT$107.31 billion in Taipei and about 1.5 trillion won in Seoul create a shared volatility channel tied to news on AI spending.
- CurrenciesNegativeWeeks
Foreign outflows put pressure on the Taiwan dollar and the won; Focus Taiwan reported the US dollar rising sharply in Taipei the same day.
- Turkish tech buyersUncertain1–6 months
The fall in chip stocks will not lower server and memory prices in the coming weeks; HBM and memory shortages persist on the supply side.
Possibilities, ranked
- 1Choppy sideways trading50%
News of US cloud companies' borrowing keeps volatility alive, and the indices swing around their 3 November lows.
Watch: The Philadelphia Semiconductor Index and daily foreign net flows in Taipei
- 2The sell-off deepens30%
The Taiex tests its July low of 39,384, and foreign selling spreads from memory and packaging to the foundries.
Watch: The Taiex's 39,384 level
- 3A quick rebound20%
Post-midterm uncertainty clears, and strong order data on AI demand reverses the selling.
Watch: Taiwan Ministry of Finance export data for October
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- Taiex▼ −3.59%
- Kospi▼ −3.59%
- Foreign net selling in Taipei▼ NT$107.31 billion