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

Taiwan Market Cap Tops $4 Trillion on AI Boom, Overtaking UK

Taiwan overtook the UK in stock market value as the island's tech firms regained favor amid hopes for further de-escalation in the Iran war. Taiwan's market capitalization rose to $4.14 trillion as of Wednesday, making it the world's seventh largest, according to data compiled by Bloomberg that show the combined value of companies with a primary listing on the island. The UK's market was valued at around $4.09 trillion. The feat comes after the Taiex Index recouped all losses driven by the Iran war -- one of the first major markets to do so -- to reach a record high. Heavyweight Taiwan Semiconductor Manufacturing Co. also renewed its all-time high, buoyed by strong revenue growth that underscores its key role in the global artificial intelligence supply chain. "Taiwan continues to be treated as an AI hardware proxy," said Yoon Ng, head of APAC asset management growth solutions at Broadridge Financial Solutions. "As long as AI capex momentum holds, flows should remain supportive." While the size of Taiwan's $977 billion economy trails the UK's $4.3 trillion, according to International Monetary Fund's 2026 estimates, roaring export of AI-related products is boosting growth expectations for the island. The Taiex gauge has risen 16% so far this month. It gained as much as 0.7% on Thursday, extending its rally to an eighth straight session -- the longest winning streak since 2025. Meanwhile, the UK's FTSE 100 Index gained less than 4%, amid lingering concerns over sticky inflation and interest rates that are higher than in the rest of Europe. Still, equities in the UK are luring back investors amid geopolitical uncertainty, boosted by a significant exposure to the energy and defensive sectors. A flurry of strategists including at Barclays Plc, Citigroup Inc. and HSBC Holdings Plc are favoring the FTSE 100 either as a geopolitical hedge or as a preferred exposure in the current environment. "The commodity-based sectors of energy and basic materials, which could benefit from elevated energy and metal prices, represent nearly a fifth of the UK market cap," said HSBC strategists including Duncan Toms. "In 2022, the UK stood out as one of the best markets in a backdrop of global stagflation." A Bank of America Corp. survey in April showed the UK is the second-most favored market in Europe after Switzerland, a similar position to last month's survey. It was the second least-preferred in February. Still, a net 16% of global fund managers are underweight British stocks, compared with 15% last month.

Taiwan overtakes UK in stock market value on AI chip boom

Taiwan's stock market has overtaken the UK's in total value, making it the world's seventh largest as the AI investment boom drives demand for chips made by Taiwan Semiconductor Manufacturing Company. Taiwanese equities' total market capitalisation hit $4.13tn on Thursday, ahead of the UK's $4.09tn, according to a Bloomberg dataset that counts actively traded, primary-listed securities on a country's exchange. Taiwan's market has been supercharged by AI service providers that depend on chips produced by TSMC, which makes up 45 per cent of the country's entire market capitalisation. "This is the tech and AI supercycle," said William Bratton, head of cash equity research for Asia-Pacific at BNP Paribas. The crossover came as TSMC, the world's largest contract chipmaker, reported record first-quarter earnings. Net income jumped 58 per cent year on year to NT$572.5bn ($18bn), ahead of analysts' forecasts. Revenues rose 35 per cent to NT$1,134.1bn. The AI boom has driven TSMC shares up almost a third so far this year to an all-time high. The chipmaker said in January it would accelerate capital spending to meet AI demand, as customers have had to grapple with shortages. "We are using multiple levers to do everything we can wherever we can however we can to maximise the support to our customers across all platforms," said CC Wei, TSMC's chief executive. He expected full-year revenue to increase by more than 30 per cent, exceeding the company's previous forecast. A large portion of Asia's market gains over the past year have been driven by TSMC and South Korean chipmakers Samsung and SK Hynix. "The UK and most of Europe doesn't really have anything exposed to this tech supercycle in listed equities aside from ASML," said Bratton. "If the AI rally continues, Korea is the story and it could overtake the UK too." South Korea's total market capitalisation, according to the Bloomberg dataset, stands at $3.7tn. The US, China, Japan, Hong Kong, India and Canada are ahead of Taiwan. The dataset mainly reflects domestic companies and does not include secondary listings, depositary receipts or exchange traded funds. London's broader financial market remains larger than that of Taiwan. Meanwhile, the UK's FTSE 100 index is up 6.1 per cent year to date, compared with the Taiex's 26.5 per cent gain. TSMC on Thursday said its capital spending would be "towards the high end" of a $52bn-$56bn range this year, as Big Tech companies such as Nvidia continue to push chip suppliers to increase their production capacity.