## Taiwanese Chip Stocks Face Adjustment Period: Global Manufacturing Weakness Triggers Chain Reactions

Global manufacturing signals are turning pessimistic. According to the latest data, China's official manufacturing PMI has continued to decline to **48.7**, falling below the expansion-contraction line of 50, hitting a new low for the year; manufacturing PMIs in South Korea and Taiwan have also been pressured to **49.2** and **49.8**, respectively, reflecting that overall Asian industrial activity has entered a contraction phase. This wave of economic slowdown directly impacts the chip supply chain, which is highly dependent on exports, and Taiwanese chip stocks and mature process manufacturers are at the forefront, facing short-term adjustment pressures.

## Why Are the Chip Industry Particularly Vulnerable to Impact?

The structural characteristics of the chip industry determine its sensitivity to global economic fluctuations. Products such as memory, logic chips, ICs for capital equipment, and automotive chips are highly reliant on overseas orders. Once global demand cools, shipment volumes immediately decrease. At the same time, the globalized supply chain—from raw materials to packaging—is dispersed, and the generally weak manufacturing in Asia leads to delivery delays and rising costs, creating a "slowing exports + rising costs" double squeeze.

When orders decrease, wafer foundries and packaging/testing plants cut production first, leading to inventory buildup that compresses gross margins. This sensitivity has caused major chip stocks like TSMC, UMC, Silicon Power-KY, and Macronix to undergo a comprehensive correction recently, with TSMC's stock price falling slightly by **1.5%**, reflecting market expectations of a slowdown in global orders.

## Investor Focus on Stock Selection Differentiation

From the ranking of IC design companies, industry differentiation has already become apparent. Some high-end IC design firms still maintain steady orders, but mid- and low-end product lines face pressure. Inquiry prices for automotive MCUs, power management ICs (PMIC), and NOR Flash have turned conservative, indicating that downstream customers are adopting a cautious attitude toward medium- and long-term demand.

US chip stocks are also under pressure, with giants like Nvidia, Intel, and AMD experiencing recent increased volatility. The fundamental reason lies in the global demand uncertainty driven by the contraction of Asian manufacturing PMI. Whether the chip industry can stabilize by early 2026 will directly influence the valuation reassessment of semiconductor stocks.

## Three Core Risks for Investment Layout in 2026

**Supply Chain Concentration Risk**: Mature process chips (40–180nm) are still concentrated among a few manufacturers and in a single country. Any disruption could amplify market volatility.

**Geopolitical and Trade Variables**: Ongoing US-China trade tensions will directly impact order scheduling and capacity planning, making supply chain restructuring inevitable.

**Global Demand Recovery Speed**: If orders in the first half of the year do not meet expectations, it will delay stock price stabilization and investment returns.

## Cautious Deployment Is Better Than Blind Accumulation

This wave of supply chain pressure reflects a global demand weakness rather than short-term noise. If geopolitical and trade tensions continue to worsen, orders and supply chain structures will face reshuffling, and diversification of supply sources and inventory management will become the next core issues for companies and investors.

The current market strategy should be cautious deployment rather than aggressive full positions, focusing on tracking order changes and supply chain restructuring progress. For the chip industry, a period of high volatility and instability has become the norm.

However, the long-term trends of AI/data center demand, technological transformation, and medium- to long-term supply chain restructuring remain unchanged. Long-term investors who can select chip stocks with solid fundamentals, clear order visibility, and strong supply chain resilience at this time still have the opportunity to grasp industry growth waves within the next 2–3 years.