A semiconductor-focused exchange-traded fund listed in Hong Kong has experienced a significant drop.

The Fubon ICE FactSet Taiwan Core Semiconductor Index ETF (03076) has fallen nearly 7%. This ETF is the first in Hong Kong to track a Taiwan semiconductor index. At the time of reporting, it was down 6.85%, trading at HK$16.73 with a turnover of HK$7,033,800.

This movement comes as Taiwan's stock market faced substantial pressure. The Taiwan Weighted Index opened lower and continued to decline on Friday, ultimately closing down 6.47% at 42,671.27 points. The downturn was attributed to a cooling in the artificial intelligence investment frenzy and ongoing weakness in chip stocks.

A key driver of the market's fall was a sharp drop in the shares of Taiwan Semiconductor Manufacturing (TSM), which plunged over 7%. This decline occurred despite the company recently reporting strong quarterly results that exceeded market expectations.

The chipmaker's second-quarter revenue reached NT$1.27 trillion, while its net profit soared to NT$706.6 billion, representing a year-on-year increase of 77.4%. Furthermore, the company raised its full-year capital expenditure guidance for 2026, now expecting to spend between $60 billion and $64 billion, up from a previous range of $52 billion to $56 billion.

Some market analysis suggests that expectations for TSMC are already at an exceptionally high level. For the stock price to advance further, it would increasingly depend on the company's management consistently outperforming these elevated market forecasts.

Concurrently, discussions continue regarding the massive investments being made in AI infrastructure. The market is closely watching whether the expanding capital expenditures from major technology companies will ultimately translate into sufficient returns.