Taiwan's stock market capitalization has reached $4.95 trillion, surpassing India's $4.92 trillion and making it the world's fifth-largest equity market. Only the US, mainland China, Japan, and Hong Kong rank higher.
The primary driver is Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest chipmaker, whose shares have risen 49% year-to-date. TSMC now accounts for over 42% of Taiwan's main stock index.
Foreign investors have pulled approximately $24 billion from Indian equities this year, redirecting funds toward markets better positioned for the AI wave, particularly Taiwan and South Korea. Emerging-market stocks have risen for four consecutive days, reaching record highs, led by AI-linked chipmakers.
Taiwan's ascent has been swift, overtaking the UK in April 2026, then Canada, and now India. Hardware-centric markets with deep semiconductor supply chains are capturing a disproportionate share of AI-adjacent investments. TSMC fabricates advanced chips for Nvidia and Apple, while South Korea's Samsung and SK Hynix dominate the memory chip market for AI data centers.
The concentration risk is significant: with over 42% of the index tied to one company, any stumble by TSMC-from geopolitical tensions, demand slowdown, or manufacturing disruptions-could quickly erase Taiwan's market cap advantage over India.