Taiwan’s stock market has overtaken that of the United Kingdom in total value, becoming the world’s seventh largest as surging demand for artificial intelligence (AI) chips boosts investor confidence.
Taiwanese equities reached a total market capitalisation of $4.13 trillion, surpassing the UK’s $4.09 trillion, according to Bloomberg data that tracks actively traded, primary-listed securities.
AI Boom Fuels Market Surge
The rally has been powered by the rapid expansion of AI technologies, with global demand for high-performance chips driving growth. At the centre of this surge is Taiwan Semiconductor Manufacturing Company (TSMC), which accounts for around 45% of Taiwan’s total market capitalisation.
“This is the tech and AI supercycle,” said William Bratton, head of cash equity research for Asia-Pacific at BNP Paribas.
TSMC Posts Record Earnings
TSMC, the world’s largest contract chipmaker, reported record first-quarter earnings, underscoring the strength of the AI-driven boom. Net income rose 58% year-on-year to NT$572.5 billion (about $18 billion), exceeding analysts’ expectations, while revenue climbed 35% to NT$1.13 trillion.
The company forecast second-quarter sales between $39 billion and $40.2 billion, significantly higher than the $30.1 billion reported in the same period last year.
Chief executive C.C. Wei said demand remained strong, noting that “AI demand is extremely robust” and describing the current environment as an “AI megatrend”.
Advanced Chips Drive Growth
Revenue from cutting-edge 3-nanometre chips accounted for about a quarter of TSMC’s total sales in the first quarter, a sharp rise from just 6% in the third quarter of 2023. The company continues to benefit from global demand for high-performance chips used in AI workloads.
TSMC is a key supplier to Nvidia and has seen its market capitalisation rise to nearly $1.7 trillion, almost double that of South Korea’s Samsung Electronics.
Expansion Plans and Supply Risks
Despite concerns that the Middle East conflict could disrupt supplies of key materials such as helium and hydrogen, TSMC said it has sufficient safety stock.
The company is investing $165 billion to build semiconductor facilities in the U.S. state of Arizona and has revised plans in Japan to produce advanced 3-nanometre chips there, instead of focusing on older technologies.
Strong Market Performance
TSMC’s Taipei-listed shares have risen 35% so far this year, outperforming the broader Taiwanese market, which has gained 28%. The surge reflects strong investor confidence in the long-term growth of AI-driven technologies and Taiwan’s central role in global semiconductor supply chains.
(with inputs from Reuters)
