AUO has been chased by funds on reports that it is moving into advanced packaging and cooperating with Intel and TSMC, but the story was priced in too quickly, and retail investors who bought at the highs are now bearing profit-taking pressure.

• AUO hit the limit up the previous day with the largest turnover of any stock in the market, then opened lower the next day and fell more than 6% intraday.
• Foreign institutional investors bought heavily for five straight sessions before abruptly reversing to become the day's largest net seller, a clear sign of turnover at elevated levels.

• The story stems from Intel's reported interest in working with AUO on Micro LED substrates and other advanced packaging, while TSMC is also said to be evaluating taking over AUO's plant in the Central Taiwan Science Park.
• The broader market weakened in tandem, with the index slipping back below 48,000 points; TSMC fell while MediaTek bucked the trend and rose. Memory distributor Chuhung saw its cash capital increase collapse after a sharp drop in its share price, and it fell limit down at the open.
• With the Mid-Autumn Festival holiday approaching, institutional investors regard the pre-holiday selling pressure as short-term volatility and see scope for positive returns in the fourth-quarter technology peak season.

Outlook: The cooperation deals have yet to be confirmed by the company, and AUO's share price may remain highly volatile in the near term, with market attention turning to the September 24 Trump-Xi meeting and negotiations over chip controls.