Taipei, Taiwan – Investors in Taiwan were buoyed by the surge in the stock benchmark to its highest level on record, driven by expectations of increased demand for artificial intelligence technology. The Taiex climbed 3%, surpassing a January 2022 peak, as the market reopened after more than a week of Lunar New Year holiday. The bulk of the gain came from a 7.9% jump in Taiwan Semiconductor Manufacturing Co., the island’s largest stock and the key provider of foundry services for Nvidia Corp.
This new peak reflects the continued enthusiasm of investors for the AI theme, driving up shares of chipmakers and other tech firms globally. The Philadelphia Stock Exchange Semiconductor Index also climbed to a new high recently while Nvidia’s market capitalization has soared to around $1.82 trillion, surpassing Amazon.com Inc. and Alphabet Inc.
Taiwan Semiconductor Manufacturing Co. (TSMC), which has a weighting of around 30% in the Taiex, reported during the holiday that its January sales rose 7.9% from a year ago. Executives from the company met with Nvidia CEO Jensen Huang last month to discuss AI chip supply constraints, a major challenge to the AI boom. This has sparked further interest and investment in the AI value chain plays and Nvidia suppliers.
The lure of further gains in TSMC and other tech stocks has brought an inflow of cash from international investors. Foreign funds have bought nearly $14 billion worth of Taiwanese equities on a net basis since the end of October, data compiled by Bloomberg show.
The surge in Taiwan’s stock market and the dominance of TSMC in the AI technology and chip manufacturing space has piqued the interest of investors, both local and international. This represents a significant shift in the global tech market, as Taiwan continues to solidify its position as a key player in the industry.