TSMC's stock price soars, Taiwan's stock market surpasses India to become the world's fifth largest.

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Amid the ongoing global investment frenzy in artificial intelligence, the strong performance of TSMC, the world’s largest semiconductor manufacturer, has directly propelled the Taiwan stock market’s total market capitalization to surpass that of India, making it the fifth largest stock market in the world.

According to data compiled by Bloomberg, as of Monday, the total market capitalization of Taiwanese stocks has risen to $4.95 trillion, while the market value of Indian stocks has dropped to $4.92 trillion. Currently, Taiwan’s stock market is only behind the United States, mainland China, Japan, and Hong Kong in global ranking.

The absolute driving force behind this shift is TSMC. Fueled by strong momentum in the field of artificial intelligence, the leading chipmaker in the semiconductor market has seen its share price soar 43% so far this year.

Meanwhile, the optimization of the regulatory environment is further amplifying the capital agglomeration effect. Recent moves by provincial regulators to relax the cap on the proportion of domestic funds that can be invested in a single stock are expected by J.P. Morgan to attract over $6 billion in capital inflows into the Taiwan market.

AI Boom Drives Market Reshaping

Taiwan’s rise in global stock market rankings fundamentally reflects the current intense market demand for technology hardware assets.

Franklin Templeton fund manager Yi Ping Liao told Bloomberg, “The rise in Taiwan’s stock market value directly reflects its high concentration in technology hardware, a sector currently at the core of the artificial intelligence investment cycle.”

According to Yi Ping Liao’s views cited by Bloomberg, under the current macro environment, markets that have limited exposure to technology hardware are increasingly overshadowed by hardware-heavy markets like Taiwan and South Korea. This indicates that semiconductors and related technology assets have become the key factors driving global capital flows.

The fact that Taiwan’s stock market has overtaken India’s also highlights its structurally concentrated nature. As a leader in AI chip manufacturing, TSMC’s semiconductor products dominate the market and have a decisive impact on the provincial capital market. TSMC currently accounts for about 42% of the benchmark index in Taiwan’s stock market.

Policy Dividends Combine With Expected Capital Inflows

In addition to strong industry fundamentals, new regulatory provisions have created favorable conditions for TSMC and the broader market. Last month, Taiwan’s financial regulators officially raised the maximum share of domestic funds that can be invested in a single stock.

This change in rules not only directly benefits TSMC, which holds a dominant weight in the index, but also is expected to translate into tangible liquidity support. According to a J.P. Morgan research report, this policy change could help Taiwan attract over $6 billion in capital inflows, providing additional liquidity support for the market’s subsequent performance.

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