Key points
- Foreign investors set a Taiwan stock-selling record
- TSMC took the biggest share of the foreign selling
- Taiwan's state banks and local funds kept buying
Foreign investors sold a net NT$994.3 billion ($30.6 billion) of Taiwan stocks in October as a global selloff in AI chip shares spread to Asia. It was the most they had sold in any month on record, surpassing the NT$968.2 billion sold in March, when war broke out between the US and Iran.
Taiwan's Taiex fell 2,728 points, or 5.7%, in October, closing at 45,211.83 on Friday, October 30. That left it 9.3% below its October 6 record close of 49,822.55, by our calculations. A drop of 10% or more from a peak is usually called a correction.
TSMC accounted for nearly 39% of the net selling
Taiwan Semiconductor Manufacturing Co. (TSM) accounted for NT$385.9 billion, or about 38.8%, of foreign investors' net selling in October. Foreign investors also cut their holdings of chip designer MediaTek and power supply maker Delta Electronics, dealers in Taipei said.
The heaviest selling came on October 15, when foreign investors sold a net NT$302.55 billion, a one-day record. They sold a net NT$112.47 billion on October 30, the seventh-largest daily total. With two months left in the year, foreign investors have sold a net NT$2.3 trillion of Taiwan stocks, already more than in any previous year.
Taiwan's state banks and local funds kept buying
Taiwan's eight state-run banks bought a net NT$240.94 billion of stocks in October, their biggest month on record. Domestic investment trusts, or local fund management companies, bought a net NT$213.66 billion. That was their second-largest monthly total after the NT$256.88 billion they bought in July.
Together, the two groups bought a net NT$454.6 billion, equivalent to 46% of foreign investors' net sales, by our calculations.
Money also continued to flow into exchange-traded funds. Taiwan stock ETFs took in a net NT$552.7 billion in October, their second-highest monthly total after July. The largest, the Yuanta Taiwan 50 ETF (0050), drew NT$140.28 billion.
Taiwan's outflow was about twice Korea's
Korea had a heavy month of foreign selling, too, but a smaller one in dollars. Foreign investors sold a net 18.68 trillion won ($14.0 billion) of Kospi stocks in October. Mediapen, using Korea Exchange data, put the Kospi figure at 19.77 trillion won ($14.8 billion). By either count, Taiwan's outflow was more than twice as large.
The index moves ran the other way. The Kospi fell 16.2% in October, to 5,730.74, while the Taiex fell 5.7%. SK Hynix (000660) was the stock foreign investors sold most in Korea, at 10.38 trillion won ($7.8 billion). Korea's market was also far more volatile than Taiwan's through the month, as our October 30 analysis showed.
Earlier in October, some global funds preferred Taiwan for AI exposure, as foreign money left Korea.
Dealers point to AI spending, the midterms, and Anthropic's IPO
Lu Chin-wei, an analyst at Concord Capital Management, tied Friday's drop to worries over AI spending after the latest earnings from the major US cloud companies. Dealers also cited the US midterm elections on November 3 and Anthropic's planned initial public offering in mid-November as reasons large funds are pulling money out of Asian markets.
TSMC's American depositary receipts, the US-traded version of its shares, fell 5.95% in New York on Friday, while the Philadelphia Semiconductor Index fell 7.20%. Taiex futures fell 1.91% in overnight trading.
Tony Huang, chief strategy officer at Taishin Securities Investment Advisory, said the Taiex had held up better than the Philadelphia chip index and Korea's market. He also noted that the major cloud companies have kept their AI infrastructure spending plans intact. Dealers are watching whether the Taiex holds above Friday's intraday low of 44,726.
Taiwan dollar figures are converted at the rate Focus Taiwan used for October's foreign selling total, about 32.5 Taiwan dollars to the US dollar. Won figures are converted at 1,334.6 won to the dollar, the Naver Finance rate on October 30, 2026.
