Taiwan shares fell 4.22 percent on Friday to their lowest close in three weeks, marking their largest one-day percentage drop in more than a year, after a sell-off on Wall Street hurt big exporters such as TSMC. All sectors fell, pulling down the main TAIEX index by 404.14 points to end at 9,162.28.
Foreign investors were big sellers, offloading a record T$62.4 billion ($1.9 billion) worth of Taiwan shares on Friday amid signs of a weakening US housing sector. The fall was the biggest since June 8 last year, when the market plunged 4.25 percent due to political woes.
Friday's tumble marked a third day of losses for the index, dragging it down further from a more than seven-year high. Turnover was active at T$295.54 billion ($9.0 billion), but down from T$320.5 billion on Thursday.
Hurt by losses in US peers, Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world's top contract chipmaker and the market's most active issue, fell 6.16 percent, leading the semiconductor subindex down 5 percent. TSMC, which sells the bulk of its products to North America, said on Thursday that second-quarter profit fell 25 percent from a year ago. The result was in line with estimates and it forecast a stronger third quarter.
But Citigroup downgraded its rating and earnings estimates on TSMC after the Taiwan firm said sales growth in the global chip foundry market in 2007 would be lower than growth for the overall semiconductor market this year.
LCD maker AU Optronics Corp which reported strong second-quarter results on Thursday, rose 1.48 percent. Rival Chi Mei Optoelectronics Corp, whose quarterly earnings are due out next week, closed unchanged. Major telecoms operators encountered selling pressure even after some were awarded licences for WiMAX, an evolving high-speed wireless telecoms standard. Far EasTone Telecommunications Co, one of the six licence recipients, fell 4.4 percent.