Taiwan stocks skidded 3.33 percent on Tuesday, snapping two sessions of gains as worries over domestic poll corruption and incompetence later on Tuesday in a television address, but opposition parties are seeking to speed up the process of a no-confidence vote against Chen's cabinet.
"The sell-off was mostly related to political worries and if you take a look at corporate fundamentals, we didn't hear anything exciting," said Alex Huang, a vice president at Barits International Securities.
A gloomy outlook for the LCD sector triggered selling in major screen makers. AU Optronics Corp fell 3.1 percent and smaller rival Chi Mei Optoelectronics Corp dropped 2.7 percent, pulling the tech sector 3.7 percent lower. Financials, whose weighting is second only to techs in the Taiwan market, shed 3.18 percent.
But Taiwan Semiconductor Manufacturing Co (TSMC), the world's top contract chip maker, gained 0.18 percent after going ex-dividend on Tuesday.
Taiwan's top electronics components maker, Hon Hai Precision Industry Co, slumped the daily 7 percent limit even after the firm said earlier in the day it would acquire digital camera maker Premier Image Technology Corp via a share swap. Premier shares rose 0.96 percent.
Home appliance maker Tatung Co Ltd fell 5.36 percent despite a report that the company expected to make 300,000 small and medium refrigerators annually in a Vietnam plant set to start up in August.