Taiwan stocks staged a sharp rebound on Monday, surging 1,960 points in a single day for the second-largest gain on record: The TAIEX closed up 1,960.06 points, or 4.94%, at 41,661.7, with trading volume of NT$837.9 billion. It climbed as high as 42,349 intraday, at one point up 2,648 points. TSMC closed up NT$100 at NT$2,235, a gain of 4.68%, after reaching an intraday high of NT$2,290. MediaTek, Delta Electronics, Yageo, and Largan Precision hit the daily limit-up during the session. More than 120 stocks finished limit-up for the day. Among memory stocks, Nanya Technology rose more than 8% intraday, while Winbond, Phison, and Macronix came close to limit-up.
This huge bullish candle followed a full week of carnage: Taiwan stocks plunged a cumulative 5,510 points last week, falling more than 12%, with around NT$18 trillion in market value wiped out. Seven consecutive days of losses marked the longest losing streak since 2022. TSMC fell about 10% at one point last Friday, before closing down 4.69% at NT$2,135. The TAIEX ended last Friday at 39,701.64, down 1,873 points, or 4.51%, for the day.
The rebound had three forces pushing it higher. The first was a Friday rebound in U.S. stocks: The Philadelphia Semiconductor Index gained 4.21%, while TSMC's American depositary receipts soared 6.33% in a single day to $375.44, equivalent to more than NT$2,460—well above Friday's closing price in Taiwan. The catch-up rally was already set up before the market opened. The second was a forceful move by Taiwan's authorities over the weekend: The National Financial Stabilization Fund (commonly known as the National Stabilization Fund—a government fund that buys stocks to stabilize the market) held an extraordinary committee meeting on November 6 and authorized its tenth market intervention, with a funding cap of NT$500 billion. At the same time, the Financial Supervisory Commission cut the cap on securities lending sales from 30% to 3% and raised the margin requirement for short selling from 90% to 130%, effectively locking up the bears' ammunition. The third was that Taiwan index futures had already warmed up overnight: They jumped 646 points last Friday night to close at 40,298, reclaiming the 40,000 mark first.
The chain of events was clear: U.S. chip stocks rebounded Friday → TSMC's American depositary receipts rose 6.33% first → over the weekend, the National Stabilization Fund authorization and short-selling restrictions worked in tandem → on Monday, short sellers covered positions and bargain hunters entered the market → the index recovered 41,000 in a single day and touched 42,349 intraday. TSMC, MediaTek, and ASE Technology Holding together lifted the index by about 1,100 points.
But don't mistake this bullish candle for a reversal signal just yet. One strong session cannot erase concerns about TSMC's fundamentals: Its gross margin was 66.4% in the third quarter, down 1.3 percentage points from the previous quarter and below foreign investors' earlier expectations of 68% to 69%. Variable costs surged more than 33% in a single quarter, far above expectations of 15% to 20%. Analysts' reports say this correction has already priced in short-term cost headwinds, and that advanced-process capacity will remain in short supply through 2027. Earnings per share are expected to reach NT$110.83 this year, with NT$151.11 a target for next year. That's the forecast, but whether the cost blowout is a one-off or a trend will have to be settled by the numbers. A more immediate warning: Foreign investors still have close to 100,000 net short futures contracts, and margin balances have not been fully cleared out. Analysts have explicitly warned investors not to chase prices higher.
The watershed moment is tomorrow: TSMC will report October revenue on Tuesday, and those figures will say more about whether demand is truly recovering or merely faking a bounce than today's index gains. At 9:30 p.m. Beijing time the same day, the U.S. October Consumer Price Index will be released. The probability of a rate hike in December is still around 80%, and if inflation comes in above expectations, the global risk-asset rally will have to be reassessed.
There are three risks. First, if TSMC's October revenue falls short of expectations, cost concerns will immediately return, and the NT$2,235 level may not hold. Second, if the U.S. October Consumer Price Index exceeds expectations, the probability of a December rate hike will rise, and the Philadelphia Semiconductor Index's 4.21% gain on Friday may prove to have been only a technical breather. Third, the National Stabilization Fund's tenth market intervention is meant to provide a floor, not a guarantee. NT$500 billion is the funding cap, not money already spent. If the index falls again, the stabilization fund cannot prop it up indefinitely.
After losing 12% in a week, Taiwan stocks recouped half of that in a day. Rather than saying the bull is back, it's more accurate to say policy has temporarily calmed the panic. The real test isn't today's bullish candle; it's TSMC's revenue and the U.S. October Consumer Price Index tomorrow.
#台积电 #TaiwanStocks
This huge bullish candle followed a full week of carnage: Taiwan stocks plunged a cumulative 5,510 points last week, falling more than 12%, with around NT$18 trillion in market value wiped out. Seven consecutive days of losses marked the longest losing streak since 2022. TSMC fell about 10% at one point last Friday, before closing down 4.69% at NT$2,135. The TAIEX ended last Friday at 39,701.64, down 1,873 points, or 4.51%, for the day.
The rebound had three forces pushing it higher. The first was a Friday rebound in U.S. stocks: The Philadelphia Semiconductor Index gained 4.21%, while TSMC's American depositary receipts soared 6.33% in a single day to $375.44, equivalent to more than NT$2,460—well above Friday's closing price in Taiwan. The catch-up rally was already set up before the market opened. The second was a forceful move by Taiwan's authorities over the weekend: The National Financial Stabilization Fund (commonly known as the National Stabilization Fund—a government fund that buys stocks to stabilize the market) held an extraordinary committee meeting on November 6 and authorized its tenth market intervention, with a funding cap of NT$500 billion. At the same time, the Financial Supervisory Commission cut the cap on securities lending sales from 30% to 3% and raised the margin requirement for short selling from 90% to 130%, effectively locking up the bears' ammunition. The third was that Taiwan index futures had already warmed up overnight: They jumped 646 points last Friday night to close at 40,298, reclaiming the 40,000 mark first.
The chain of events was clear: U.S. chip stocks rebounded Friday → TSMC's American depositary receipts rose 6.33% first → over the weekend, the National Stabilization Fund authorization and short-selling restrictions worked in tandem → on Monday, short sellers covered positions and bargain hunters entered the market → the index recovered 41,000 in a single day and touched 42,349 intraday. TSMC, MediaTek, and ASE Technology Holding together lifted the index by about 1,100 points.
But don't mistake this bullish candle for a reversal signal just yet. One strong session cannot erase concerns about TSMC's fundamentals: Its gross margin was 66.4% in the third quarter, down 1.3 percentage points from the previous quarter and below foreign investors' earlier expectations of 68% to 69%. Variable costs surged more than 33% in a single quarter, far above expectations of 15% to 20%. Analysts' reports say this correction has already priced in short-term cost headwinds, and that advanced-process capacity will remain in short supply through 2027. Earnings per share are expected to reach NT$110.83 this year, with NT$151.11 a target for next year. That's the forecast, but whether the cost blowout is a one-off or a trend will have to be settled by the numbers. A more immediate warning: Foreign investors still have close to 100,000 net short futures contracts, and margin balances have not been fully cleared out. Analysts have explicitly warned investors not to chase prices higher.
The watershed moment is tomorrow: TSMC will report October revenue on Tuesday, and those figures will say more about whether demand is truly recovering or merely faking a bounce than today's index gains. At 9:30 p.m. Beijing time the same day, the U.S. October Consumer Price Index will be released. The probability of a rate hike in December is still around 80%, and if inflation comes in above expectations, the global risk-asset rally will have to be reassessed.
There are three risks. First, if TSMC's October revenue falls short of expectations, cost concerns will immediately return, and the NT$2,235 level may not hold. Second, if the U.S. October Consumer Price Index exceeds expectations, the probability of a December rate hike will rise, and the Philadelphia Semiconductor Index's 4.21% gain on Friday may prove to have been only a technical breather. Third, the National Stabilization Fund's tenth market intervention is meant to provide a floor, not a guarantee. NT$500 billion is the funding cap, not money already spent. If the index falls again, the stabilization fund cannot prop it up indefinitely.
After losing 12% in a week, Taiwan stocks recouped half of that in a day. Rather than saying the bull is back, it's more accurate to say policy has temporarily calmed the panic. The real test isn't today's bullish candle; it's TSMC's revenue and the U.S. October Consumer Price Index tomorrow.
#台积电 #TaiwanStocks