Taiwan Stock Market Suffers Record 3,737-Point Plunge as TSMC Hits Limit Down in Global AI Sell-Off

Taiwan’s stock market suffered the biggest intraday fall in its history on Friday, 6 November 2026, as a global sell-off in artificial intelligence (AI) and chip stocks swept across Asia. The benchmark TAIEX index plunged 3,737.67 points within minutes of the opening bell — a drop of almost 9% — before recovering part of the loss to close 1,873.08 points lower at 39,701.64.

The fall was so sharp that the world’s largest chipmaker, Taiwan Semiconductor Manufacturing Company (TSMC), hit its daily price limit within moments of trading starting, and more than 500 stocks ended the day at their lowest allowed price. The sell-off followed a brutal session on Wall Street the night before, where fears about the future of AI spending wiped trillions of dollars off technology shares.

For a market that had been one of the world’s best performers this year, Friday was a reminder of how quickly confidence can vanish — and how much of the global AI boom now runs through a single island.

What happened in Taipei

Trading in Taipei opened at 9 a.m. local time on Friday and immediately went into freefall. The TAIEX, Taiwan’s main stock index, dropped below the 40,000-point mark within minutes and kept falling to an intraday low of 37,837.05 points — 3,737.67 points, or 8.99%, below the previous day’s close of 41,574.72.

That was the largest intraday point drop ever recorded in the Taiwanese market, according to Taiwan’s Central News Agency (CNA).

As the session went on, bargain hunters stepped in and the index clawed back roughly half of its losses. But the damage was still severe: the TAIEX closed at 39,701.64, down 1,873.08 points, or 4.51%, on the day. It was the fourth-largest closing point drop in the market’s history, and the index finished below 40,000 for the first time in the current slide.

Trading was heavy. The total value of shares traded on Friday reached 1.25 trillion New Taiwan dollars, as investors rushed to sell — and others rushed in to buy what they saw as bargains.

The pain was not limited to one day. For the week as a whole, Taiwan’s index lost 12.2%, its worst weekly fall since 1991, according to Reuters. The index had closed at 45,211.83 points on 30 October, just a week earlier — meaning it has now given back more than 5,500 points in five trading sessions.

The selling also followed a warning sign from the previous day. Foreign institutional investors sold a net 102.46 billion New Taiwan dollars of shares on Thursday, 5 November — the 10th-largest daily net sale on record, according to the Taiwan Stock Exchange. The foreigners were already heading for the exit before Friday’s panic began.

TSMC at the centre of the storm

No company mattered more to Friday’s fall than TSMC. The chipmaker accounts for more than 40% of the total value of the Taiwanese stock market, so when TSMC falls, the whole market falls with it.

TSMC shares hit their daily lower limit of 2,020 New Taiwan dollars shortly after the market opened, down 220 New Taiwan dollars from the previous close. That single-day price drop was the largest ever recorded for the stock in intraday trading, CNA reported, and it wiped about 5.7 trillion New Taiwan dollars off the company’s market value.

The stock recovered some ground later in the day but still closed 4.69% lower — its second-largest closing point loss on record.

TSMC is the world’s biggest maker of advanced computer chips. It manufactures the processors used in almost every leading AI system, smartphone and data centre on the planet. When investors start doubting the AI boom, TSMC is the first share they sell — and because it is so large, its fall drags the entire Taiwanese market down with it.

The selling spread across Taiwan’s technology sector. MediaTek, another major chip designer, fell to its daily limit of 3,115 New Taiwan dollars. Delta Electronics, a power and electronics supplier, also hit its daily limit at 1,020 New Taiwan dollars. Hon Hai Precision Industry, known around the world as Foxconn — the company that assembles iPhones and AI servers — fell more than 9%.

Securities analysts quoted by CNA warned that the market could face further selling linked to margin calls. That is when investors who borrowed money to buy shares are forced to sell their holdings to repay their loans, which pushes prices down further and can trigger more forced selling. The analysts advised investors to wait for clear technical signs that the market had stabilised before buying.

Why investors are suddenly selling AI stocks

The sell-off did not start in Taiwan. It started in the United States on Thursday, 5 November, and Asia simply woke up to the damage.

On Wall Street, the Dow Jones Industrial Average fell 1,833.06 points, or 3.4%, to close at 51,523.06. The S&P 500 dropped 4.36% and the Nasdaq Composite sank 5.52%. The Philadelphia Semiconductor Index, which tracks the biggest US chip companies, plunged 12.2% — its second-biggest fall on record.

Two chip giants led the American rout. Nvidia fell 9.3% and Advanced Micro Devices (AMD) tumbled 17.3%, according to the Associated Press. The Nasdaq closed about 12% below the record high it had set only a month earlier.

Investors are worried about two things, and both are about the AI data centres that have driven the stock market for the past two years.

First, politics. Democrats won control of both chambers of the US Congress in the midterm elections this week, and investors fear the new Congress could tighten rules on building AI data centres. Voters in several states have pushed back against data centres because of their huge electricity use and the effect on local power bills. If data-centre construction slows down, companies will buy fewer AI chips, less electrical equipment and fewer servers — and that hits Asian suppliers such as TSMC, Samsung and Foxconn directly.

Second, money. Companies have spent hundreds of billions of dollars building AI infrastructure, and investors are increasingly asking whether that spending will ever earn a good return. The fear is that the AI boom has been built on borrowing and hype, and that share prices climbed too far, too fast. The Associated Press reported that investors were also worried about rising borrowing costs, which make it more expensive to fund huge data-centre projects.

Timothy Moe, Goldman Sachs’ chief Asia Pacific equity strategist, told CNBC that position unwinding, stop-loss selling and heightened volatility had made the Asian falls worse. “The market’s tendency is always to shoot first and ask questions later,” he said.

The sell-off spreads across Asia

Taiwan was the worst hit, but it was not alone. The panic spread across every major Asian market on Friday.

South Korea’s KOSPI index fell more than 8% during the session, triggering a market-wide circuit breaker that halted trading for 20 minutes. Samsung Electronics lost 7% and memory chipmaker SK Hynix fell more than 8%.

Japan’s Nikkei 225 fell around 6%, its worst day since April 2025. Chip-testing equipment maker Advantest fell 12.2%, technology investment giant SoftBank Group dropped about 11.6%, and memory chipmaker Kioxia Holdings fell nearly 10%.

Hong Kong’s Hang Seng index fell 0.7% and the Shanghai Composite in mainland China declined 1.3% — milder losses, but still part of the same regional retreat. China’s STAR Market and ChiNext Artificial Intelligence Index each lost more than 4%.

The scale of the rout was remarkable because it came just one day after a post-election rally. The S&P 500 had risen 1.6% to 7,688.62 on Wednesday, 4 November, as investors celebrated the election result. Within 24 hours, that entire rally — and much more — had been wiped out.

What it means for ordinary investors

For most people, a stock market crash in Taiwan might seem distant. But this one matters more than most, for three reasons.

First, Taiwan sits at the heart of the world’s technology supply chain. TSMC makes the advanced chips inside the phones, laptops, cars and AI systems that people use every day. When its shares fall this sharply, it signals that investors are worried about the entire technology economy — not just one company.

Second, the sell-off shows how connected the world’s markets have become. A political result in Washington, a bad day on Wall Street and a trading halt in Seoul can combine within hours to produce a record fall in Taipei. Money now moves across borders in seconds, and panic moves just as fast.

Third, the fall is a test of whether the AI boom is built on solid ground. If data-centre spending slows because of new regulations, higher borrowing costs or simple doubts about returns, the companies that supply the AI industry — from chipmakers in Taiwan to server assemblers and memory producers in South Korea and Japan — will feel it first. Friday’s trading was the market’s way of pricing in that risk all at once.

That does not mean the AI industry is finished. The technology is real, and demand for computing power is still growing. But Friday was a sharp reminder that share prices can rise far faster than profits, and that when confidence breaks, the fall can be violent.

What happens next

Taiwan’s National Stabilization Fund — a government-backed fund that can step in to support the market in times of crisis — said it would not rule out calling an emergency meeting if disorderly trading continued, according to Taiwanese broadcaster TTV.

Investors will now watch several things closely. The first is the US October jobs report, which was due for release on Friday, 6 November, and could influence whether the US Federal Reserve cuts interest rates again. Lower rates would make borrowing cheaper and could ease some of the pressure on technology stocks.

The second is whether the selling continues in the United States when Wall Street reopens. Asian markets were reacting to Thursday’s American losses; if US shares stabilise, Asian markets may steady too. If they fall again, the pressure on Taiwan and its neighbours will return.

The third is politics. Investors will be watching what the new Democratic majorities in Congress say about data centres, energy and technology regulation in the coming weeks. Any sign of new restrictions could renew the selling; any sign of a softer approach could help the market recover.

For now, though, Friday 6 November goes into the record books: the day Taiwan’s stock market fell further, faster, than ever before — and the day the world was reminded that the AI boom, for all its promise, can turn into a bust with terrifying speed.

Frequently asked questions

How far did Taiwan’s stock market fall on 6 November 2026?

The TAIEX fell as much as 3,737.67 points during the session — the largest intraday point drop in its history — before closing down 1,873.08 points, or 4.51%, at 39,701.64.

Why did TSMC shares fall so sharply?

TSMC is the world’s largest chipmaker and accounts for more than 40% of Taiwan’s stock market value. Investors sold chip stocks after a Wall Street rout, driven by fears that new US political controls on AI data centres and doubts about returns on AI spending could cut demand for chips. TSMC hit its daily price limit at the open and closed 4.69% lower.

What caused the global AI stock sell-off?

A mix of worries: the Democrats’ midterm election victories raised fears of tighter rules on AI data-centre construction; investors questioned whether heavy AI infrastructure spending would earn good returns; and rising borrowing costs added to the pressure. The Nasdaq fell 5.52% and the Philadelphia Semiconductor Index plunged 12.2% on Thursday, 5 November.

Which other Asian markets were affected?

South Korea’s KOSPI fell more than 8% and triggered a circuit breaker; Japan’s Nikkei 225 fell around 6%; Hong Kong’s Hang Seng dropped 0.7% and Shanghai’s Composite fell 1.3%.

How bad is the fall in context?

For the week ending 6 November, Taiwan’s index lost 12.2% — its largest weekly loss since 1991, according to Reuters. The closing fall of 1,873 points was the fourth-largest closing point drop in the market’s history.

Conclusion

Friday’s rout was a reminder that the AI boom which lifted world markets to record highs can also cut the other way. Taiwan’s record points drop, South Korea’s trading halt and Japan’s worst day since April 2025 all came from the same fear: that the flood of money into AI data centres may slow down, just as borrowing gets more expensive and politics in Washington turns less friendly to big tech.

For investors, the lesson is an old one — markets that rise fast on excitement can fall fast on doubt. For everyone else, the test now is whether this was a sharp correction or the start of a longer downturn. The jobs data from the US, the signals from governments in Seoul and Taipei, and the words of the new Congress in Washington will decide that in the days ahead.

Sources

• Taiwan’s Central News Agency (via EL7) — “Taiwan stock index plunges 4.47% at market close” (6 November 2026): https://el7.ai/en/news/2026-11-06-taiwan-stock-index-plunges-4-47-at-market-close
• Taiwan’s Central News Agency (via EL7) — “Taiwan’s TAIEX hits record point drop as TSMC shares plunge 9.8%” (6 November 2026): https://el7.ai/en/news/2026-11-06-taiwans-taiex-hits-record-point-drop-as-tsmc-shares-plunge-9-8
• Associated Press (via EL7) — “China and Taiwan stocks sink on fears of tighter US AI regulations” (6 November 2026): https://el7.ai/en/news/2026-11-06-china-and-taiwan-stocks-sink-on-fears-of-tighter-us-ai-regulations
• Unite.ai — “Asian AI and chip stocks tumble on US data center fears”: https://www.unite.ai/asian-ai-and-chip-stocks-tumble-on-us-data-center-fears/
• TokenPost — “Asian AI and chip stocks tumble” (6 November 2026): https://www.tokenpost.com/news/investing/49899
• Europe Says (Japan) — “Asian AI and chip stocks tumble” (6 November 2026): https://www.europesays.com/japan/119537/

This article is for general information and education only. It is not legal or financial advice.