U.S. retail sales and consumer confidence data both cooled, and profit-taking pressure emerged after the S&P 500’s consecutive record highs, sending all four major U.S. indices lower on Friday. TSMC’s ADR also fell 0.96%. However, Taiwan’s stock market opened on the 17th without being dragged down by the international market weakness. The TAIEX bucked the trend and opened higher, surging as much as 332.63 points in early trading to touch an intraday high of 46,143.64, swiftly reclaiming the 46,000-point psychological level and demonstrating strong bullish resilience.

Performance among heavyweight stocks was mixed. TSMC (2330.TW) opened up NT$15 at NT$2,410, a gain of 0.63%, holding firmly above its 5-day moving average. Delta Electronics (2308.TW) was the standout performer, surging more than 5% in early trading to NT$1,985, serving as a key engine driving the index higher. ASE Technology Holding (3711.TW) rose NT$18 to NT$634, up 2.92%. Hon Hai (2317.TW) traded in a narrow range near the flat line at NT$260. MediaTek (2454.TW) bucked the trend and weakened, falling NT$45 to NT$4,165, down more than 1%, making it the only notable decliner among the top five weighted stocks.

Market focus centered on Chuan Hu (2059.TW), the second-highest priced stock on Taiwan’s main board. The stock gapped up to lock limit-up at NT$13,750, once again setting a new all-time high. Chuan Hu has benefited from strong demand for AI server slide rails, and with foreign investors continuing to raise their target prices, the stock has accumulated substantial gains since August. Today’s limit-up move signals that bullish momentum remains intact.

As of 9:06 a.m., a total of 11 stocks on the main board had quickly locked limit-up. In addition to Chuan Hu, these included Jentech (3653.TW) at NT$5,340, Rexon (1515.TW) at NT$36.90, Chung Hwa Chemical (1727.TW) at NT$82.60, Taiwan Union Technology (4905.TW) at NT$93.10, Lumens Digital Optics (6225.TW) at NT$44.40, Visual Photonics Epitaxy (2455.TW) at NT$417, Century Iron and Steel (5314.TW) at NT$17.80, FineMat Applied Materials (6967.TW) at NT$75.6, Good Way Technology (3272.TW) at NT$15.15, and Solomon Technology (2359.TW) at NT$175.

The PCB sector emerged as another bright spot in today’s session. Unimicron (3037.TW) surged to lock limit-up at NT$1,120; Kinsus Interconnect Technology (3189.TW) rose 7.08% to NT$923; Nan Ya PCB (8046.TW) gained 4.21% to NT$1,365; and ZDT-KY (4958.TW) advanced more than 4% to NT$509. Analysts noted that AI server and high-end substrate demand continues to strengthen, driving improved operating momentum across the PCB sector and attracting a clear return of capital inflows.

The memory chip sector showed mixed performance. Winbond Electronics (2344.TW) rose 3.27% to NT$189, Nanya Technology (2408.TW) gained 4.49% to NT$535, Macronix (2337.TW) fell 3.65% to NT$133, and Powerchip (6770.TW) traded in a narrow range near the flat line.

Notably, a clear divergence emerged between the main board and the over-the-counter market. While the TAIEX surged more than 300 points in early trading, the TPEx index bucked the trend and declined, falling as low as 398.97, down 0.71%. Analysts observed that this phenomenon reflects capital concentrating heavily into large-cap weighted stocks and specific strong sectors, while small and mid-cap stocks were crowded out, creating a market structure characterized by “rotating out of small caps into large caps.”

Looking back at last week’s performance, Taiwan’s main board index accumulated a gain of 1,585.1 points, or 3.58%, marking a second consecutive weekly advance. The three major institutional investor categories posted combined net buying of NT$264.54 billion (approximately $8.3 billion), with foreign investors buying NT$206.14 billion (approximately $6.4 billion), investment trusts buying NT$15.37 billion (approximately $480.5 million), and proprietary traders buying NT$43.03 billion (approximately $1.3 billion), indicating that institutional capital continues to flow back into Taiwan’s equity market.

Looking ahead to this week’s trading, analysts cautioned that Wednesday (the 19th) marks TAIEX futures settlement, with foreign investors still holding a massive net short position of 85,179 contracts. Short-term volatility risk should not be underestimated. Good De Investment Advisory analyst Chang Chia-hao noted that TSMC’s fundamentals remain unchanged, and the NT$2,410 level coincides precisely with its 5-day moving average. Foreign investors typically use TSMC to suppress the broader market ahead of settlement to hedge their short positions, but with the stock firmly holding above its 5-day moving average, foreign investors may face significant short-squeeze pressure. He recommended that investors maintain a 50% equity position and wait until after Wednesday’s settlement, when the market direction becomes clearer, before adding positions.

Another institutional analyst issued a warning from a macroeconomic perspective, pointing out that U.S. July retail sales posted their largest decline in more than two years, and the University of Michigan’s preliminary August consumer sentiment index fell to 51, signaling cooling consumption momentum. Additionally, U.S.-Iran tensions remain a source of disruption. U.S. Treasury Secretary Bessent indicated that a new round of sanctions against Iran is expected to be announced this week. If the situation in the Strait of Hormuz remains unresolved, oil prices may stay elevated. The Federal Reserve still has multiple inflation and employment data releases scheduled before its September meeting, leaving many variables in play.

Nevertheless, the medium-to-long-term outlook remains bullish. Analysts noted that the AI supply chain continues to heat up, with emerging themes such as robotics and drones gaining momentum. Listed company revenues and profits are expected to benefit from AI development and continue reaching new highs. Taiwan’s market fundamentals remain strong, with a conservative year-end index target of 50,000 points and an optimistic scenario of 55,000 points. KGI Securities’ morning commentary also noted that as long as the TAIEX does not break below its quarterly moving average, short-term pullbacks can still be viewed as positioning opportunities. The firm recommended focusing on sectors with strong thematic appeal and positive fundamental outlooks, highlighting that the silicon wafer industry is benefiting from AI-driven demand expansion and pricing power, with stocks such as Formosa Sumco Technology (3532.TW), Wafer Works (6182.TW), and GlobalWafers (6488.TW) worth monitoring.