Taiwan stock market surges past UK with $4.14 trillion valuation as AI boom fuels TSMC growth

Taiwan Overtakes UK in Historic Market Shift

The Taiwan stock market has achieved a milestone by surpassing the UK in total stock market value, reaching $4.14 trillion compared to the UK's $4.09 trillion as of mid-April 1

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. This makes Taiwan the world's seventh-largest equity market by market capitalization, a feat driven almost entirely by the AI boom and the island's central role in the artificial intelligence supply chain. The achievement is particularly striking given that Taiwan's $977 billion economy remains significantly smaller than the UK's $4.3 trillion economy 1

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TSMC Powers Record Performance

TSMC, the world's largest contract chipmaker, stands at the center of this transformation. The company reported record first-quarter earnings, with net income jumping 58% year-on-year to NT$572.5 billion ($18 billion), exceeding analyst forecasts 2

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. TSMC revenue growth reached 35% to NT$1,134.1 billion, underscoring the company's pivotal position in meeting global AI chip demand. TSMC shares have climbed almost a third year-to-date to reach an all-time high, with the chipmaker now representing 45% of Taiwan's entire market cap 2

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. CEO CC Wei announced plans to accelerate capital spending to "towards the high end" of a $52 billion-$56 billion range this year, as Big Tech companies like Nvidia continue pushing suppliers to expand production capacity 2

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AI Hardware Proxy Status Drives Investment Flows

"Taiwan continues to be treated as an AI hardware proxy," explained Yoon Ng, head of APAC asset management growth solutions at Broadridge Financial Solutions. "As long as AI capex momentum holds, flows should remain supportive" 1

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. The Taiex Index has surged 26.5% year-to-date and gained 16% in April alone, extending its rally to an eighth straight session—the longest winning streak since 2025 1

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. Taiwan was among the first major markets to recoup all losses from the Iran war, reaching record highs as geopolitical tensions eased 1

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Tech Supercycle Reshapes Global Equity Rankings

William Bratton, head of cash equity research for Asia-Pacific at BNP Paribas, characterized the shift as part of "the tech and AI supercycle" 2

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. He noted that "the UK and most of Europe doesn't really have anything exposed to this tech supercycle in listed equities aside from ASML," suggesting South Korea could be next to overtake the UK if the AI rally continues 2

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. South Korea's market capitalization currently stands at $3.7 trillion, with Samsung and SK Hynix also benefiting from AI chip demand. Meanwhile, the FTSE 100 Index has gained just 6.1% year-to-date, hampered by inflation concerns and interest rates higher than the rest of Europe 1

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What This Means for Global Investors

The AI chip boom has fundamentally altered how fund managers view Asian tech stocks versus traditional European equities. TSMC's announcement that it is "using multiple levers to do everything we can wherever we can however we can to maximise the support to our customers across all platforms" signals that supply chain constraints remain a key challenge even as production expands 2

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. Wei's forecast for full-year revenue growth exceeding 30% suggests the AI-driven demand shows no signs of slowing. While a Bank of America survey showed fund managers remain net 16% underweight British stocks, the UK's exposure to energy and defensive sectors continues attracting investors seeking geopolitical hedges 1

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. The question now is whether Taiwan market cap can sustain its momentum if AI capital expenditure cycles moderate, or if other Asian markets riding the tech supercycle will continue reshaping the global economy's equity landscape.🟡_ =