TAIPEI, Aug 5 (Reuters) - Taiwan stocks fell

over 7% in mid-morning trade on Monday, with tech stocks

including TSMC plunging as investors sold off one of Asia's top

performing markets this year, spooked by the prospects for

global tech stocks and the U.S. economy.

Taiwan stocks opened nearly 5 percent down at the bell. The

decline was fuelled by a sell-off in tech, and then spread more

broadly as the index dipped below the key 20,000 level.

"It is difficult to predict when the decline will stop. It's

too early to tell," said David Wu, an analyst with Cathay

Futures Consulting Department in Taipei.

Taiwan was one of several markets that tumbled across Asia

on Monday amid fears the United States could be heading for

recession and as investors sought refuge from risk assets.

Concerns about a widening conflict in the Middle East also

weighed on sentiment.

A two-day rout late last week left the S&P 500 nearly

6% from its July peak while the tech-heavy Nasdaq Composite

extended losses to notch its first 10% correction from a

record high since early 2022.

"We think the decline will continue into the next two days,

seeking technical support levels of 19,200 - 19,300 points,"

Allen Huang, a vice president of Mega International Investment

Services, Huang told Reuters.

Shares in the dominant technology stock Taiwan Semiconductor

Manufacturing ( TSM ) , the world's largest contract

chipmaker, took a battering. The stock had surged over the past

year amid skyrocketing demand for chips used in artificial

intelligence, but its price fell by over 7 percent to a low of

T$835 before bouncing back slightly.

"The fundamentals for TSMC have not changed at all. Yes,

there were market talks last week that delivery of Nvidia's ( NVDA ) new

GB 200 chips would be delayed, and Intel's earnings results were

terrible. But TSMC and the upstream AI supply chain would not be

affected by those events," Huang added.

Taiwan's Minister of Economic Affairs JK Guo, said investors

needed to brace for more possible pain. "Everyone must be

prepared for a global stock market crash, this is part of the

business cycle," Guo told reporters.

(Additional reporting by Jeanny Kao and the Taipei newsroom;

writing by James Pomfret; Editing by Miral Fahmy)