Share prices closed 0.11 percent lower as early gains driven by Wall Street's overnight advances gave way to selling on technical factors, dealers said.
Investors also decided to take profits ahead of the weekend on terror fears after British police said they uncovered a plot to blow up US-bound flights, they said.
The TAIEX closed down 7.51 points at 6,571.10, on turnover of NT$87.27 billion (US$2.67 billion). For the week, the benchmark index rose 1.9 percent.
China Airlines Ltd (
Technology stocks managed to stay in positive territory on expectations of increasing demand for products in the peak season, dealers said.
"Technology stocks shrugged off worries over the slow season [in the second quarter], investors are now pinning hopes on improving industry prospects in the current quarter," said Johnny Lee, a manager with President Securities (
However, technical pressure around the quarterly-moving average of 6,571 points convinced investors to opt for a cautious approach for the broader market this session.
Lee said narrow-band consolidation could feature in the stock market next week, unless major fresh leads emerge.
Taiwan Semiconductor Manu-facturing Co (
MediaTek Inc (聯發科), the nation's biggest chip designer by revenue, fell 0.2 percent to NT$28.45. Despite yesterday's fall, the company's stock still ended 5.9 percent higher this week.
AU Optronics Corp (友達光電), the world's fourth largest producer of flat-panels, fell 0.4 percent to NT$49.55, after rising in the past three sessions. Smaller rival Chi Mei Optoelectronics Corp (奇美電子) dropped 0.5 percent to NT$38.80.
There were 353 gainers, 641 decliners, and 139 shares closed unchanged.