Taiwan Market Rises Ahead of India as TSMC Gains

Taiwan overtook India in stock market value, powered mainly by a breakneck rally in the world’s largest chipmaker Taiwan Semiconductor Manufacturing Co.

The island’s market capitalization climbed to $4.95 trillion as of Monday, according to data compiled by Bloomberg. India’s value has dropped to $4.92 trillion. Taiwan’s stock market is now the fifth largest in the world, behind only the U.S., mainland China, Japan and Hong Kong.

Taiwan’s ascent up the global equity rankings is largely driven by TSMC, which now accounts for more than 42% of the benchmark index, representing intense market concentration. The chipmaker’s shares have rallied 49% this year as it has benefited from the artificial intelligence trade, in which its semiconductors have a dominant market position.

The surge in Taiwan’s market value, contrasted with India’s decline, highlights the two dominant themes shaping financial markets in 2026. One: surging oil prices from the Iran war are weighing heavily on the growth outlook for nations that depend on energy imports, such as India. And two: fierce AI optimism is triggering a global rally in tech shares, disproportionately benefiting manufacturing hubs such as Taiwan and South Korea.

“Taiwan’s rising market capitalization is fundamentally a reflection of its heavy concentration in tech hardware, which is currently at the center of the AI investment cycle,” said Yi Ping Liao, a fund manager at Franklin Templeton. “Markets with limited exposure to tech hardware are increasingly being overshadowed by tech hardware-heavy markets such as Taiwan and Korea.”

New regulations are also in TSMC’s favor. Taiwan’s financial regulator last month increased the limit that domestic funds can invest in a single stock. Under the new guideline, funds that invest solely in Taiwanese stocks can hold up to 25% of their net assets in any listed company whose weighting exceeds 10% in the Taiwan Stock Exchange, up from a previous limit of 10%. Currently, only TSMC meets the criterion.

The change may help lure in more than $6 billion of inflows to Taiwan, JPMorgan Chase said in a research note.

While Taiwan has overtaken in market value, India’s $4.15 trillion-dollar economy — among the fastest growing in the world — still trumps the island’s $977 billion gross domestic product, according to International Monetary Fund estimates.

Source: Japan Times