Taiwan stocks fell 1.92 percent on Monday to a five-week closing low, as investors took quick profit on high-flying technology shares such as High Tech Computer Corp (HTC) after offshore investors sold heavily.
The main TAIEX share index reversed early gains to end down 135.89 points at 6,938.26. The index lost 2.8 percent last week.
The electronics sub-index dropped 1.86 percent while the bank and insurance index slumped 2.47 percent.
Turnover on the market was active at T$121.57 billion (US $3.8 billion). Smartphone maker HTC, the highest valued stock on the market, slumped the daily 7 percent limit on heavy profit-taking. The stock had risen 75.3 percent so far this year.
The island's top solar cell maker, Motech Industries, dropped 4.08 percent from earlier gains in the session, after the Economic Daily News reported that the firm will collaborate with silicone wafer maker MEMC Electronic Materials Incto invest in a new solar plant.
Index heavyweight Taiwan Semiconductor Manufacturing Co (TSMC), the world's top contract chip maker, fell 2.72 percent, while smaller rival United Microelectronics Corp dropped 4.81 percent, dragging down the electronics sub-index.
Macronix International Co Ltd gained 1.55 percent and was the second most actively traded stock by volume on the market. Advanced Semiconductor Engineering Inc rose 1.04 percent.
Goldman Sachs analyst Henry King reported on Monday that it is a good time to buy Wistron Corp shares as falling sales in April has left the stock undervalued.
The bank sees a strong rebound in sales for Wistron in June, driven by shipments of new notebook computers and Xbox 360. Wistron's stock declined 1.54 percent.
Opto Technology jumped the 7 percent maximum to T$18.80 as investors bet on growing demand for the light-emitting diodes (LEDs) it makes for consumer products.