Taiwanese shares saw their worst-ever selling streak by foreign investors as heavyweight Taiwan Semiconductor Manufacturing Co. fell out of favor.

Global funds reduced holdings for the past 12 sessions, shedding a net NT$391 billion ($11.9 billion) worth of Taiwanese stocks through Wednesday, according to exchange data compiled by Bloomberg. TSMC, which accounts for more than a third of the benchmark’s weight, fell nearly 10% during the period as foreign investors dumped 155 million shares.

The tech-heavy market has been caught in this year’s drawdown in global chip stocks as concerns mount over the sector’s frothy valuation. Investors who once couldn’t get enough of leading AI stocks have turned more selective in the wake of DeepSeek’s success, which threw into doubt the notion that China is far behind its global competitors in developing artificial intelligence.

“While AI remains a transformative force, market volatility and uncertainty have led to increased caution among investors,” HSBC Holdings Plc analysts including Jeremy Chen wrote in a note. Given these challenges, “we shift focus to non-tech for a more defensive stance.”

Taiwan’s benchmark Taiex Index climbed for a second day Thursday, trimming its slide from a February high to around 5%. TSMC also rebounded after gains in US peers overnight and a Reuters report that the company pitched to US chip designers about taking stakes in a joint venture that would operate Intel Corp.’s factories. Foreigners added less than a million of its shares on Wednesday.