AI Stock Correction Drives Taiwan Share Rout as Experts Map Deleveraging Scenarios

Taiwan stocks have gained roughly 20,000 points from their low over the past six months, with the rally heavily concentrated in AI and large-cap technology shares. Meanwhile, leverage has built up across mortgages, personal loans, auto loans and stock-backed lending, a phenomenon dubbed the simultaneous burden of “four loans.” When overvalued US technology stocks pull back, margin calls and stop-loss selling can amplify each other. The correction is therefore testing whether Taiwan’s market funding structure can withstand deleveraging.

The latest reports said a correction in AI-related shares had sent Taiwan stocks sharply lower after their 20,000-point surge in six months. Experts outlined optimistic, neutral and pessimistic scenarios, ranging from a rapid stabilization to a prolonged consolidation or a deeper decline caused by a breakdown in leverage. The source material did not identify the experts’ institutions or provide the report date, index level or amount of margin financing. The overall assessment was that the long-term AI trend remained intact, while near-term risks depended on the pace of deleveraging.