TAIPEI, May 26, 2026, 19:03 (Taiwan Standard Time)
Taiwan passed India in stock-market size, with most of the move coming from gains in Taiwan Semiconductor Manufacturing Co. The chipmaker’s strength in AI chips has helped push Taiwan into the group of top equity-market winners from the AI trade. The total value of listed Taiwan shares was $4.95 trillion as of May 25, ahead of India’s $4.92 trillion, Bloomberg data shows. Taiwan is now fifth in the world, trailing the U.S., China, Japan, and Hong Kong.
AI keeps moving money around the market, not just on Wall Street. Funds have shifted into chipmakers, memory, and hardware. India is getting hit by higher oil prices, supply snags, and shares under fire from the Iran war.
TSMC makes up over 42% of Taiwan’s main index now, a rare level of single-company weight for the market. The stock is up 49% this year with investors moving in for exposure to chips in AI systems—software for learning, language, and decision tasks.
Taiwan’s gains in market cap are tied to its “heavy concentration in tech hardware,” Franklin Templeton fund manager Yi Ping Liao said. She said markets with less tech hardware are getting overshadowed by Taiwan and Korea. mint
Rules have played a part here. Taiwan’s regulator in April lifted the cap on how much a domestic fund can put in a single stock to 25% from 10% if that company’s exchange weighting is over 10%. Only TSMC qualifies. JPMorgan Chase & Co. estimated in a note cited by Bloomberg that the move might bring more than $6 billion into Taiwan.
The trade is widening out. Jason Hsu, CIO at Rayliant Global Advisors, called it “structural diversification away from TSMC,” as investors check out other AI stocks. MediaTek and Samsung Electronics have outperformed TSMC this year. Brian Ooi, portfolio manager at Swiss-Asia Financial Services, said agentic AI — AI that can do more work with less human oversight — is pushing the move because “agents will require more CPUs,” the standard chips used in most data centers. Taipei Times
Samsung and SK Hynix are now at the core of the AI memory-chip boom, not just TSMC. South Korea’s KOSPI index topped 7,000 this month as Samsung hit $1 trillion in market cap. At that moment, both Samsung and SK Hynix together accounted for 44% of the KOSPI’s entire value, Reuters said.
India stocks dropped Tuesday, with the Nifty 50 and Sensex both falling after new U.S. strikes on Iran drove Brent crude up 3.3% to $99.35. That hurt hopes for a quick peace deal. According to Reuters, India, the world’s number three oil importer and user, is getting hit by rising crude prices and supply disruptions. Its major indexes are down a lot this year.
India’s big state fuel sellers bumped up diesel and petrol prices for the fourth time this month, according to Reuters, as they try to claw back losses from more expensive crude. The move means higher energy costs that have been sitting on Indian stocks are now hitting wallets at the pump, too.
Concentration is the main risk. If AI spending drops off, or if investors pull back on chip stocks, Taiwan’s market could get hit fast because TSMC and its suppliers hold so much weight. Seo Sang-young at Mirae Asset Securities told Reuters that strong AI-chip demand might keep Korea’s rally up, but falling demand, inflation, and weak growth from the Iran war could flip the market lower. The same story could play out in other hardware-driven markets.
TAIEX hit a session high of 44,097.63 on Tuesday in Taipei but finished down 119.03 points at 43,525.37 as traders pulled back. TSMC dropped 1.73% to NT$2,270, according to Taiwan News.
Right now, Taiwan keeps the strength. The market is trading as a direct call on one thing: will the AI hardware cycle keep up its pace to support the bets investors have made?
