Taipei: Shares in Taiwan recorded a historic daily gain of more than 1,700 points on Monday, closing above the 40,000-point threshold for the first time. The rally was driven by large-cap semiconductor stocks amid optimism regarding the ongoing AI boom, according to dealers.
According to Focus Taiwan, the Taiex, the Taiwan Stock Exchange's benchmark index, surged by 1,778.51 points, or 4.57 percent, to close at 40,705.14. The index fluctuated between 39,228.39 and 40,755.52 throughout the day, with a total turnover of NT$1.01 trillion (US$31.51 billion).
Kerry Huang, an analyst at Concord Securities, noted that buying in the semiconductor industry was triggered by significant spending plans from major U.S. cloud service providers (CSPs) aiming to bolster their AI infrastructure. Google's, Amazon's, Microsoft's, and Meta's CSPs proposed a combined capital expenditure of approximately US$725 billion in 2026, marking a 77 percent increase from 2025, as revealed in their recent investor conferences.
Huang emphasized the role of Taiwan Semiconductor Manufacturing Co. (TSMC) as a major beneficiary of this trend, which led investors to flock to its shares, significantly boosting the Taiex. TSMC, representing over 40 percent of the total market value, rose by 6.56 percent to close at NT$2,275.00. This contributed approximately 1,110 points to the Taiex's rise and propelled the electronics index and semiconductor subindex by 5.58 percent and 6.75 percent, respectively.
MediaTek Inc., a smartphone IC designer, soared 10 percent, the maximum daily increase, closing at NT$2,870.00 due to its advancements in application-specific integrated circuit (ASIC) development for AI devices. Additionally, memory chip supplier Nanya Technology Corp. experienced a 10 percent surge, closing at NT$237.00 amid a supply shortage.
IC packaging and testing service firm ASE Technology Holding Co. also saw a 10 percent increase, ending at NT$528.00 due to strong AI applications. Beyond the semiconductor sector, iPhone assembler and AI server maker Hon Hai Precision Industry Co. gained 3.64 percent to close at NT$227.50, while AI server supplier Quanta Computer Inc. added 1.76 percent to end at NT$318.00.
Despite the focus on electronics, non-tech stocks lagged, with Formosa Petrochemical Corp. dropping 4.26 percent to NT$54.00, and Formosa Chemicals and Fibre Corp. losing 2.87 percent to close at NT$50.80. Shinkong Synthetic Fibers Corp. and Far Eastern New Century Corp. also saw declines.
Conversely, the electric machinery industry showed resilience due to the demand for robust electricity supply infrastructure in the AI era. Shihlin Electric and Engineering Corp. rose by 6.33 percent, closing at NT$201.50, while Allis Electric Co. climbed 10 percent to NT$121.00.
In the financial sector, which experienced a 0.17 percent decline, Cathay Financial Holding Co. fell by 1.30 percent to NT$76.20, whereas Fubon Financial Holding Co. rose by 1.11 percent to NT$91.00.
According to TWSE, foreign institutional investors made a net purchase of NT$66.98 billion worth of shares on the main board on Monday.