According to Focus Taiwan, as of 11:53 a.m., the Taiex had fallen 1,830.55 points, or 4.40 percent, to 39,772.81, while the bellwether electronics index had fallen 5.08 percent. The last time the Taiex closed below 40,000 points was April 30. Dealers noted that concerns were intensifying over the potential for massive AI investments to fail in generating satisfactory revenue, leading investors to reduce their holdings of electronic stocks. This followed a 4.49 percent drop in the Philadelphia Semiconductor Index overnight.

Wednesday's plunge came on the heels of a more than 2,000-point drop in the Taiex on Tuesday. The index had previously closed at 47,018.99 on July 1. Taiwan Semiconductor Manufacturing Co. (TSMC), the contract chipmaker accounting for over 40 percent of total market value, had fallen 3.29 percent to NT$2,205.00 (US$67.85) as of 11:53 a.m. The decline in TSMC's stock contributed approximately 520 points to the Taiex's overall fall.

Memory chip suppliers also faced significant losses, with Nanya Technology Corp. plummeting 10 percent, reaching the maximum daily decline, to NT$353.50.