May 28, 2026
NEW DELHI – Taiwan’s stock market has overtaken India in terms of valuation to become the fifth largest in the world. The rally was primarily driven by the world’s largest chipmaker, Taiwan Semiconductor Manufacturing Company.
Taiwan’s market capitalisation climbed to $4.95 trillion, while India’s market value declined to $4.92 trillion. Taiwan’s stock market now ranks behind only the United States, mainland China, Japan, and Hong Kong.
The surge reflects strong investor confidence in Taiwan’s semiconductor ecosystem. TSMC now accounts for about 42 per cent of the benchmark index, highlighting significant market concentration.
TSMC shares have rallied 49 per cent this year, benefiting from the global boom in Artificial Intelligence, where its semiconductors hold a dominant market position.
The sharp rise in market value underscores growing optimism around AI, which has triggered a global rally in technology stocks, disproportionately benefiting manufacturing hubs such as Taiwan and South Korea.
Taiwan has also introduced new regulations favouring TSMC. The country’s financial regulator has increased the investment limit for domestic funds in a single stock.
Under the revised regulation, funds investing exclusively in Taiwanese equities can now hold up to 25 per cent of their net assets in any listed company whose weighting exceeds 10 per cent in the Taiwan Stock Exchange. Earlier, the limit stood at 10 per cent.
Foreign institutional investors have also shifted part of their allocations towards global AI-related opportunities.
Recently, brokerage firm Elara Capital stated in a report that early signs are emerging that the global investor rush into AI and commodity trades may be losing momentum, while foreign fund outflows from India have started to moderate.
According to the report, foreign investor funds had largely shifted towards markets such as South Korea and Taiwan since April 2025 to capitalise on the AI boom, while Brazil benefited from the commodity rally, often at India’s expense.
