Taiwan’s stock market plunged by more than 2,600 points in early trading on Monday, June 8. This follows a steep decline of U.S. indices on Friday.

TSMC stock fell by NT$135 (US$4.27) to NT$2,230 (US$70.62), marking the largest intraday decline in the company’s history. Its market capitalization shrank by NT$3.5 trillion (US$111 billion). Other key stocks, like Yageo, ASE Group, Hon Hai (Foxconn), and Delta Electronics fell by around 7 percent.

Traders reported system outages at several brokerages due to excessive trading volume on Monday morning. That included Yuanta Securities, CTBC Securities, and Taishin Securities.

This follows a steep decline in U.S. stock prices on Friday, June 5, especially in the artificial intelligence sector. The tech-heavy Nasdaq Composite Index fell 4.18 percent and the Philadelphia Semiconductor Index plunged 10.26 percent.

According to analysis by Taishin Securities, market players are concerned whether the AI boom might end early due to rising interest rates. While both U.S. stocks and bonds fell, consumer staples shares went up in price. Analysts say this indicates the market is shifting away from overbought AI stocks and resembles sector rotation rather than a widespread panic, like the Dot-com crash of 2000. 

Taishin Securities notes that U.S. stocks are overheated but not in a bubble, which will cause a short-term market correction in Taiwan. They say the market is pulling back after a significant rally around tech stock, but AI demand remains fundamentally strong.