A man walks inside the Taiwan Stock Exchange in Taipei
The Taiwan Weighted Stock Index fell 1,655.96 points, or 3.41%, on October 15, with semiconductor and electronics stocks under selling pressure as the market focused on the impact of the US inflation and interest rate outlook on the valuation of technology stocks.

Taiwan stocks plunged on Thursday (Oct. 15), with artificial intelligence (AI) and semiconductor shares bearing the brunt of the selling. The latest US inflation data came in above market expectations, while concerns that the Federal Reserve could adopt a more hawkish monetary policy prompted investors to reassess technology stock valuations and financing costs for the AI industry.

According to a Central News Agency (CNA) report, the Taiex closed down 1,655.96 points, or 3.41%, at 46,969.87. It was the sixth-largest single-day point decline on record. Turnover reached NT$1.32 trillion, significantly higher than in the previous session.

US consumer prices rose 3.7% year on year in September, exceeding the market forecast of 3.6%. Persistent inflationary pressure has raised concerns that the Federal Reserve may keep interest rates high for longer or even raise them further, increasing corporate financing costs. This could particularly affect AI data centers and the semiconductor industry, both of which require sustained, heavy capital investment.

Major technology stocks broadly weakened. Taiwan Semiconductor Manufacturing Co. (TSMC) fell 2.01% to close at NT$2,440 per share. MediaTek dropped 6.93% to NT$4,165, while ASE Technology plunged 10% to NT$673, hitting its daily price limit. Power-management and electronic component stocks also came under selling pressure.

Foreign investors sold a net NT$302.56 billion worth of listed shares in Taiwan, reflecting a significant shift in capital flows. Some investors moved into telecommunications and defensive stocks, suggesting that funds were seeking relatively stable assets as market volatility intensified.

Although Taiwan's semiconductor industry continues to benefit from AI demand, its short-term market performance remains influenced by global interest-rate expectations, technology stock valuations and international risk sentiment. US economic data, comments from Federal Reserve officials, and earnings and outlooks from major technology companies will continue to shape the direction of Taiwan stocks.