A major supplier of solder materials for the PCB and semiconductor industries, Shenmao Technology Inc. (3305.TW), has been hit with a settlement default totaling NT$87.29 million, according to the Taiwan Stock Exchange (TWSE). The case, reported by brokerages Yuanta Donghu and Hua Nan Fengyuan, marks the second settlement default involving a listed company this year and the ninth across Taiwan’s listed and over-the-counter markets so far in 2024.

Local media noted that Shenmao's default is the largest single settlement default in Taiwan so far this year, making it a focal point in a market already rattled by growing concerns over an AI-related stock bubble.

Before the default, Shenmao's stock had surged sharply on bullish sentiment after rival Ruisheng Metal announced its closure. Shares skyrocketed from NT$58 on July 17 to hit NT$106.5 on August 19, the highest level in nearly 18 years—an 83.6% gain in just over a month.

However, under Taiwan's T+2 settlement system, the default coincided with the August 20 trading session. Shenmao opened at NT$102 and briefly touched NT$103 before plunging by NT$10.6 to close at the limit-down price of NT$95.9, a sudden reversal that caught many investors off guard.

According to TWSE data, securities firms reported combined defaulted trades—purchases plus sales—worth NT$94.14 million on August 22, with a net amount of NT$4.3 million. Shenmao was the only stock that met the threshold for public disclosure.

The incident highlights heightened volatility in Taiwan's technology sector, where AI-related plays had led recent rallies but are now fueling fears of speculative excess.