The Taiwan Stock Exchange (TWSE) experienced a significant decline, with the TAIEX dropping by 3.53 percent, equivalent to 830.7 points, to settle at 22,694.71. This downward trend was primarily triggered by the imposition of tariffs by the United States on imports from China, Mexico, and Canada. These tariffs directly impacted major tech companies, particularly those with manufacturing facilities in China where Taiwanese electronics suppliers have strategically positioned themselves to benefit from tax incentives.

The market turmoil was exacerbated by the introduction of a new Chinese artificial intelligence (AI) model called DeepSeek, which instigated a wave of panic selling in US tech shares, notably affecting companies like Nvidia Corp. TWSE chairman Sherman Lin attributed the poor performance of the TAIEX to the recent trends on Wall Street, underscoring the interconnectedness of global markets.

Despite the uncertainties brought about by DeepSeek, prominent US tech giants such as Meta Platforms Inc and Alphabet Inc’s Google reassured their commitment to investments in AI. This commitment is expected to positively impact local firms within the supply chain. While DeepSeek has sparked debates on AI training methodologies, it is not projected to halt the progress of AI development and applications.

Notable Taiwanese companies felt the brunt of the market downturn, with Taiwan Semiconductor Manufacturing Co (TSMC) witnessing a 5.73 percent decline in its share value, closing at NT$1,070. Similarly, AI server manufacturer Quanta Computer Inc experienced a significant drop, hitting the daily limit at NT$243. The total revenue generated by Taiwan’s listed firms in the previous year amounted to NT$43 trillion, with only a small percentage being attributed to exports to the US via China, Canada, and Mexico.

Market turnover stood at NT$492.831 billion, with foreign institutional investors offloading a net NT$74.4 billion worth of shares, marking the fourth-largest sell-off on record. Additionally, proprietary traders reduced their stakes by a net NT$20.4 billion. In response to potential tariffs on semiconductor imports, Lin highlighted the adaptability of Taiwanese firms, citing TSMC’s establishment of fabrication plants in the US, Japan, and Germany.

The global market sentiment was reflected in the performance of other Asian indices, with Japan’s Nikkei 225 declining by 2.66 percent and Australia’s S&P/ASX 200 dropping by 1.79 percent. However, Hong Kong’s Hang Seng index remained relatively stable following the Lunar New Year holiday, while mainland Chinese markets were set to resume trading the next day. The evolving dynamics of international trade relations and market forces continue to shape the trajectory of the TWSE and its constituent companies.