Taiwan’s benchmark index recovered from a sharp early fall as investors bought chip and memory stocks, despite mounting concern over costly AI infrastructure and highly leveraged expansion.
Asian markets steadied on Tuesday after a sharp early sell-off, as buyers stepped in around the technical support level on Taiwan’s benchmark index. In Taipei, the weighted index briefly sank more than 400 points to an intraday low of 46,397.12 before rebounding into positive territory. By 9:46 a.m., it was up 115.37 points, or 0.25%, at 46,937.45, while the smaller-cap index also turned higher. The recovery came even as Japan and South Korea initially tracked lower in the wake of an uneven Wall Street session.
Overnight in the United States, the Philadelphia Semiconductor Index snapped an eight-day losing streak and rose 1.6%, helping lift the Nasdaq Composite and the S&P 500. But the rebound was narrow. According to Reuters and Bloomberg, gains were concentrated in technology and artificial intelligence shares, while a large share of S&P 500 constituents still finished lower, underscoring how fragile sentiment remains. Investors continue to worry about expensive valuations, higher borrowing costs and the funding needs of companies building out AI infrastructure.
Those concerns have centred in part on the financing model behind the AI boom. Market attention has increasingly focused on CoreWeave, the cloud computing company often viewed as closely tied to Nvidia’s ecosystem, after some of its debt prices suggested yields of about 15% to 16%, according to market data cited in the report. CoreWeave’s shares fell sharply last week and slipped again on Monday, adding to questions about whether some AI-related businesses are leaning too heavily on debt to expand data centres. The move in US Treasury yields and persistently elevated oil prices have also kept pressure on expectations for easier monetary policy.
In Asia, the heaviest early pressure came from South Korea, where the KOSPI fell as much as 4% before trimming losses. Bloomberg reported that Samsung Electronics and SK Hynix both came under selling pressure, while newly listed data-centre infrastructure company Elice slumped on its first day of trading in Seoul. The broader regional index also weakened before recovering some ground, suggesting investors remain wary rather than fully risk-off.
Taiwan’s market found support from heavyweight chip and technology names, but also from more domestically focused sectors. MediaTek helped underpin the rebound, while Taiwan Semiconductor Manufacturing Co. and United Microelectronics Co. pared earlier losses. Passive component makers also attracted buying, with Yageo, Walsin Technology, Chilisin Electronics and Holy Stone moving higher. That strength reflects hopes that rising demand for AI servers and high-performance computing could support orders for higher-end multilayer ceramic capacitors, especially as some Japanese and Korean producers shift capacity towards premium products.
Memory stocks also fared better than the broader market. Although Nanya Technology edged lower, names such as Phison Electronics, Adata Technology and InnoDisk advanced, while Winbond, Powerchip Semiconductor Manufacturing and other related shares posted modest gains. The pattern points to a market that is still nervous about the scale and cost of AI spending, but quick to buy back sectors seen as having direct exposure to the next wave of hardware demand.
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