Taiwan's stock market reached a total market capitalization of US$4.95 trillion as of May 25, overtaking India’s US$4.92 trillion to become the world's fifth-largest by market cap [1]. The rise was led by Taiwan Semiconductor Manufacturing Company (TSMC), whose stock price soared 49% this year and now accounts for about 42% of Taiwan's weighted stock index [1].
TSMC chairman Wei Zhejia expressed confidence in the company's growth, saying, "We continue to see AI models being adopted increasingly across consumers, enterprises, and sovereign AI. This trend is driving demand for stronger computing power, supporting strong demand for advanced semiconductor chips" [2]. He forecasted annual revenue growth of over 30% in 2026 despite rising component costs and raised employee bonuses by more than 30% for several years, expecting the trend to continue this year [2, 3]. TSMC’s stock price jumped from around NT$950 (US$38) in mid-2025 to NT$2425 (US$97) in early June 2026, more than doubling in under a year [2, 3].
The surge in Taiwan’s market value stems from the global AI-driven boom that has boosted technology manufacturing hubs like Taiwan and South Korea. South Korea’s Kospi index jumped from 7,000 to 8,000 points in just seven trading days by mid-May 2026, led by chipmakers Samsung Electronics and SK Hynix, fueled by AI infrastructure demand [4]. Nvidia announced plans to increase its annual investment in Taiwan to up to US$150 billion, up from previous levels of US$100 billion to $150 billion over the past half-decade, with construction of a new Taiwan headquarters set to start by year-end 2026 and open by 2030 [5, 6]. Nvidia CEO Jensen Huang said "Taiwan is the center of the AI revolution" and stated at Taipei Computex that "we try to pay employees the most generous compensation possible" amid rising labor demands in AI [6, 7]. The new HQ aims to be closer to key suppliers like TSMC, supporting Nvidia's expanding operations [5].
India’s stock market, despite the country’s much larger GDP of approximately US$4.15 trillion compared to Taiwan’s US$977 billion, has lagged behind this year [1]. Foreign investors sold nearly US$24 billion of Indian stocks in 2026, contributing to an 8% decline in the Indian stock index so far this year [1]. Challenges cited include rising energy costs, slower corporate earnings, and a lack of AI infrastructure beneficiaries in India’s stock lineup [1]. Meanwhile, India remains one of the world's fastest-growing economies and maintains strong household savings that may support a future market rebound [1].
Broadcom reported a 48% year-on-year revenue increase for Q2 2026, driven by a 143% jump in AI semiconductor revenue to US$10.8 billion. However, the company fell short of some investor expectations, causing its shares to decline sharply in pre-market trading [8, 9]. Broadcom’s CEO said customers plan to deploy more custom AI chips in 2027, raising projected power consumption estimates to above 10 gigawatts from an earlier 7-gigawatt forecast while maintaining a long-term AI chip sales target of US$100 billion [8].
Geopolitical tensions involving Iran and the Middle East continue to influence market sentiment and oil prices in mid-2026. US-Iran talks remain in flux, further contributing to market uncertainty despite the rally in AI-related stocks in the US through early June 2026, with Nasdaq and S&P 500 hitting new highs [10, 11, 12].
TSMC is expanding factories in Taiwan and Japan to meet strong demand it cannot satisfy with local production alone [3]. The company’s chairman dismissed rival Samsung’s repeated claims to catch up technologically within 10 years as "daydreaming" [3]. Meanwhile, Foxconn announced a strategic partnership with Intel to develop next-generation AI infrastructure and intelligent computing platforms [3].
Next major events include the planned start of Nvidia’s new Taiwan headquarters construction by the end of 2026, expected to boost Taiwan’s role in the AI chip supply chain significantly [5, 6].
