Taiwan overtakes India as world’s fifth-largest stock market on AI-fueled TSMC rally

Taiwan has surpassed India to become the world’s fifth-largest stock market, reaching a total market capitalization of US$4.95 trillion as the global AI investment boom continues to lift chip-related shares.

The rally has been driven primarily by demand for artificial intelligence chips, with Taiwan Semiconductor Manufacturing Company at the center of the surge. TSMC shares are up 49% this year, and the company now accounts for about 42% of Taiwan’s benchmark TAIEX index, underscoring how closely the broader Taiwanese market is tied to the AI semiconductor cycle.

The shift also reflects a broader reallocation of global capital. Investors have reportedly redirected about US$24 billion from Indian equities toward AI-linked markets this year, helping Taiwan climb in global market rankings. The scale of TSMC’s presence, however, also highlights the concentration risk facing Taiwan’s market as its performance becomes increasingly dependent on one semiconductor giant and the durability of AI demand.